Weibo (WB) AI Stock Analysis

• Market Cap: $2.02B
• Dividend Yield: N/A
• Average Volume (3M): 1.89M
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.84
• Revenue Growth: -0.29%
• EPS Growth: -12.84%
• Country: US
• Employees: 5,268
• Sector: Communication Services
• Sector Strength: 98
• Industry: Internet Content & Information
• EPS (TTM): 1.14
• Shares Outstanding: 155,492,750
• 10 Day Avg. Volume: 1,914,412
• 30 Day Avg. Volume: 1,888,686
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.40
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $11.83
• Price Target Upside: 54.24% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Weibo's overall stock score reflects a balance of strong profitability and efficient cost management against the backdrop of recent cash flow challenges and a bearish technical outlook. The valuation suggests the stock is undervalued, which could present a buying opportunity if operational and industry risks are managed effectively. The company's strategic focus on AI and user growth indicates potential for long-term gains.

Positive Factors

Dividend Policy

Weibo announced an annual dividend policy with an annual payout of US$200mn for FY24, translating into an approximately 8% dividend yield.

Financial Performance

Non-GAAP net income grew by 40% YoY to US$107mn, 9% ahead of consensus estimate, mainly attributable to effective opex control.

Negative Factors

Advertising Revenue

Overall ad demand remained under pressure, with advertising and marketing revenue declining by 3% YoY to US$386mn on a constant currency basis in 4Q24.

Market Share

Competition may hinder WB's ability to grow at an industry-leading level, potentially resulting in market share losses.

Weibo Business Overview & Revenue Model

Company Description

Weibo Corporation, through its subsidiaries, operates as a social media platform for people to create, distribute, and discover content in the People's Republic of China. It operates in two segments, Advertising and Marketing Services; and Value-Added Services. The company offers discovery products to help users discover content on its platform; self-expression products that enable its users to express themselves on its platform; and social products to promote social interaction between users on its platform. It also provides advertising and marketing solutions, such as social display advertisements; and promoted marketing offerings, such as Fans Headline and Weibo Express, as well as promoted trends and search products that appear alongside user's trends discovery and search behaviors. In addition, the company offers products, such as trends, search, video/live streaming, and editing tools; content customization, copyright contents pooling, and user interaction development; and search list recommendation, trends list recommendation, and Weibo app opening advertisements. Further, it provides back-end management, traffic support, and product solutions to MCNs, unions, and e-commerce partners; open application platform for other app developers that allows users to log into third-party applications with their Weibo account for sharing third-party content on its platform; and Weibo Wallet, a product that enables platform partners to conduct interest generation activities on Weibo, such as handing out red envelops and coupons. The company was formerly known as T.CN Corporation and changed its name to Weibo Corporation in 2012. The company was founded in 2009 and is headquartered in Beijing, China. Weibo Corporation is a subsidiary of Sina Corporation.

How the Company Makes Money

Weibo primarily generates revenue through advertising services. The company offers a suite of advertising solutions that allow businesses and marketers to reach a vast audience via promoted feeds, display ads, and social display ads. Key revenue streams include brand advertising and performance-based advertising, which are tailored to meet the needs of different advertisers. Additionally, Weibo earns revenue from value-added services such as VIP membership subscriptions, which offer users enhanced features. Strategic partnerships, particularly with Alibaba, enhance its advertising capabilities by leveraging data analytics and e-commerce integrations, contributing significantly to its earnings.

Weibo Financial Statement Overview

Summary

Weibo demonstrates strong profitability with healthy margins and a stable balance sheet, but faces challenges with recent cash flow issues. Effective cost management is evident, yet attention to cash flow is crucial for future stability.

Income Statement

Weibo's income statement reveals stable revenue with a slight decline in 2024 compared to 2023, yet gross profit margins remain strong at approximately 79%, indicating effective cost management. The net profit margin improved to 17.1% in 2024 from 19.4% in 2023, showcasing effective cost control and operational efficiency despite lower net income. The EBIT and EBITDA margins are healthy, suggesting robust operating performance.

Balance Sheet

Weibo maintains a solid balance sheet with a manageable debt-to-equity ratio of 0.53 in 2024, showing prudent financial leverage. The equity ratio is strong at 53.5%, indicating financial stability. The return on equity is at a moderate level of 8.6%, reflecting the company's ability to generate returns from its equity base.

Cash Flow

The cash flow statement for Weibo illustrates challenges, with zero reported operating and free cash flow in 2024, potentially impacting liquidity. In previous years, free cash flow was positive, indicating that recent cash flow issues might be temporary. The operating cash flow to net income ratio was favorable in prior years, reflecting efficient cash generation historically.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.76B	1.75B	1.76B	1.84B	2.26B	1.69B
	Gross Profit
1.39B	1.39B	1.39B	1.44B	1.85B	1.39B
	EBIT
495.45M	494.32M	472.93M	816.01M	697.41M	506.80M
	EBITDA
543.01M	552.83M	714.45M	289.91M	668.74M	458.99M
	Net Income Common Stockholders
375.17M	300.80M	342.60M	85.56M	428.32M	313.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
122.75M	2.35B	3.23B	3.17B	3.13B	3.50B
	Total Assets
0.00	6.50B	7.28B	7.13B	7.52B	6.34B
	Total Debt
0.00	1.86B	2.71B	2.42B	2.43B	2.43B
	Net Debt
122.75M	-29.86M	120.90M	-269.20M	11.25M	613.67M
	Total Liabilities
0.00	2.93B	3.76B	3.74B	3.83B	3.45B
	Stockholders Equity
-213.91M	3.48B	3.40B	3.33B	3.59B	2.81B
Cash Flow		Free Cash Flow
0.00	0.00	636.05M	367.40M	646.39M	706.82M
	Operating Cash Flow
0.00	0.00	672.82M	564.10M	814.02M	741.65M
	Investing Cash Flow
0.00	0.00	-736.85M	-33.01M	-423.96M	-1.21B
	Financing Cash Flow
0.00	0.00	21.69M	-91.14M	189.44M	741.96M

Weibo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.67
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WB, the sentiment is Negative. The current price of 7.67 is below the 20-day moving average (MA) of 8.71, below the 50-day MA of 9.18, and below the 200-day MA of 8.20, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 36.96 is Neutral, neither overbought nor oversold. The STOCH value of 12.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WB.

Weibo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	80 Outperform	$20.90B	21.12	10.75%	1.11%	0.63%	34.09%
BIDU	76 Outperform	$28.08B	8.79	9.14%	―	-2.60%	16.71%
PINS	76 Outperform	$19.09B	10.41	47.49%	―	19.35%	―
RDDT	64 Neutral	$20.06B	―	-27.12%	―	61.71%	-442.46%
WB	61 Neutral	$2.02B	6.90	8.74%	―	-0.29%	-12.84%
Sector *	58 Neutral	$27.01B	3.11	-10.53%	4.44%	2.30%	-43.13%
SNAP	58 Neutral	$14.96B	―	-28.69%	―	16.40%	48.48%