Back to top

Image: Bigstock

What's in the Cards for Weibo (WB) This Earnings Season?

Read MoreHide Full Article

Weibo Corporation (WB - Free Report) is scheduled to report third-quarter 2019 results on Nov 14.

The Zacks Consensus Estimate for third-quarter earnings has been steady at 75 cents over the past 30 days.

For the third quarter of 2019, Weibo expects revenues to increase 6% to 9% year over year on a constant currency basis.

The consensus mark for revenues is currently pegged at $467.2 million, which implies growth of 1.5% from the figure reported in the year-ago quarter.

Notably, the company beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average positive surprise of 3.8%.

Weibo Corporation Price and EPS Surprise

Weibo Corporation Price and EPS Surprise

Weibo Corporation price-eps-surprise | Weibo Corporation Quote

In the second quarter, Weibo reported adjusted earnings of 68 cents per share, which beat the Zacks Consensus Estimate by almost 8%.

Moreover, net revenues increased 1.2% from the year-ago quarter to $431.8 million and beat the consensus mark by 0.6%.

Let’s see how things have shaped up for the upcoming announcement.

Key Factors to Consider

Weibo’s strategy to offer more premium content and improve social interaction is likely to have aided user base expansion in third-quarter 2019.

Moreover, growth in premium content consumption and increase in paying user base is expected to have improved Weibo’s competitive position in the market, thereby aiding top line growth in the to-be-reported quarter.

Further, Weibo’s collaborations with smartphone manufacturers like Samsung is expected to have boosted ad-revenues in the to-be-reported quarter. Additionally, revamping of its community products like super topic and fans group is expected to have improved interaction among customers, thereby aiding user retention.

Weibo upgraded its super FST products (improved content-based targeting, optimized traffic direction and boosted traffic direction performance), which is expected to have driven ad revenues in the third quarter.

However, year-over-year tough comparisons due to the FIFA World Cup (in 2018) and postponement of some shows due to regulations is expected to have hurt the top line in the to-be-reported quarter. Moreover, sluggish marketing spending by smartphone manufacturers is expected to have negatively impacted ad-revenue growth.

What Our Model Says

According to the Zacks model, the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP increases the odds of an earnings beat.

Weibo has a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Twin River Worldwide Holdings, Inc. (TRWH - Free Report) has an Earnings ESP of +13.25% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Spectrum Brands Holdings (SPB - Free Report) has an Earnings ESP of +2.60% and a Zacks Rank #3.

International Game Technology (IGT - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #3.    

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>