In a report released today, Miranda Zhuang from Bank of America Securities reiterated a Sell rating on Weibo, with a price target of $8.70.
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Miranda Zhuang’s rating is based on several key factors impacting Weibo’s financial performance. The company’s advertising revenue has shown a negative year-over-year growth, with a reported decline of 6% in the third quarter. This downturn is attributed to budget contractions in key advertising sectors such as smartphones and online games, despite some growth in eCommerce and automotive ads.
Furthermore, while Weibo has made advancements in AI technology for its advertising and search capabilities, these improvements have not yet translated into significant financial gains. The company’s overall revenue and adjusted net profit are expected to remain negative, leading to a reiterated Underperform rating. The current stock price exceeds the price objective set by the analyst, indicating potential overvaluation in the market.
Zhuang covers the Communication Services sector, focusing on stocks such as Baidu, Weibo, and AutoHome. According to TipRanks, Zhuang has an average return of -5.2% and a 38.60% success rate on recommended stocks.