Market Overview

A Quick Look At Weibo's Q3 Beat

A Quick Look At Weibo's Q3 Beat
58 Biggest Movers From Yesterday
Weibo shares are trading lower after Morgan Stanley downgraded the company's stock from Overweight to Equal-Weight.
Market Mispricing Hides Weibo's Strong Fundamentals (Seeking Alpha)

Weibo Corp (ADR) (NASDAQ: WB) is a Chinese social media platform that allows users to blog. Launched in 2009 by SINA Corp (NASDAQ: 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 (NYSE: 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.

Related Links:

Bernstein Starts Chinese Internet Names: Most Initiated At Underperform

Morgan Stanley: Chinese Internet Stocks Must Boost Investments, User Retention, Geographic Reach


Latest Ratings for WB

Jan 2019Morgan StanleyDowngradesOverweightEqual-Weight
Aug 2018JP MorganMaintainsOverweightOverweight
Aug 2018JefferiesMaintainsBuyBuy

View More Analyst Ratings for WB
View the Latest Analyst Ratings

Posted-In: Alibaba Ani Tu Jefferies Karen Chan WeiboAnalyst Color Reiteration Analyst Ratings Best of Benzinga


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