A Quick Look At Weibo's Q3 Beat

Weibo Corp (ADR) WB is a Chinese social media platform that allows users to blog. Launched in 2009 by SINA Corp SINA, it was spun off as an independently traded public company in 2014. In the wake of the company's third-quarter release on Tuesday, Jefferies offered its quick take on the results.

The Analyst

Weibo's third quarter results were reviewed by Jefferies analyst Karen Chan in a Tuesday note.

The Rating

Jefferies maintained its Buy rating and $105 price target on shares of Weibo.

The Thesis

Weibo delivered strong quarterly results, with revenue and non-GAAP net profit exceeding consensus estimates by 7 percent and 9 percent, respectively, according to Jefferies. 

The outperformance, according to Jefferies, came about due to strong demand from KA and SME advertisers, which together contributed revenues of $251.5 million, up 70.6 percent. Additionally, Alibaba Group Holding Ltd BABA-related ad revenues also exceeded forecasts, Chan said. (See Chan's track record here.) 

Among key metrics, monthly average users grew at a rate of 27 percent to 376 million, in line with the Jefferies' estimates. The midpoint of the company's fourth-quarter revenue guidance was 5 percent above the consensus estimates, Chan said. 

Price Action

Weibo shares were down 3.84 percent to $95.71 at the time of writing. The stock has been on a tear since the beginning of 2017 and has more than doubled in the year-to-date period, with 115.8 percent in gains. Since the start of the third quarter, the gain is an even more staggering 244.9 percent, although the stock has seen a slight pullback since the start of September.

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