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Weibo Corp (WB)
:WB
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Weibo
(NASDAQ:WB)74Outperform
Positive Factors
Earnings
Weibo reported a better-than-expected third quarter with total revenues increasing by 5% year-over-year, attributed to strong advertising demand from the food and beverage, apparel, and automobile industries during the Olympics.
Value-added Services
Value-added services grew 25% year-over-year in the third quarter, thanks to the company's channel strategy and successful acquisition of high-quality users.
Negative Factors
Advertising Revenue
The overall ad market remained soft, with cosmetics and personal care sectors dragging down ad revenue despite other verticals showing growth.
Weibo (WB) vs. S&P 500 (SPY)
Market Cap
$2.68B
Dividend YieldN/A
Average Volume (3M)1.61M
Price to Earnings (P/E)7.6
Beta (1Y)1.01
Revenue Growth0.99%
EPS Growth-7.37%
CountryUS
Employees5,268
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)1.44
Shares Outstanding155,492,750
10 Day Avg. Volume1,500,196
30 Day Avg. Volume1,611,153
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.51
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.40Price Target Upside-13.92% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering0
Weibo Business Overview & Revenue Model
Company DescriptionWeibo Corporation (WB) is a leading social media platform in China, offering a microblogging service similar to Twitter. It operates in the digital media and technology sectors, providing a space where users can create, share, and discover content. Weibo's core services include user-generated content, advertising, and social networking features, catering to a vast audience that ranges from individuals and influencers to businesses and advertisers.
How the Company Makes MoneyWeibo primarily generates revenue through advertising services, which account for the majority of its earnings. The platform offers a variety of advertising solutions, including display ads, promoted feeds, and social search ads that allow brands to target its vast user base effectively. Additionally, Weibo earns from value-added services such as membership subscriptions, virtual currency sales, and other services tailored to both users and businesses. Strategic partnerships with content creators, media companies, and other digital platforms further enhance its monetization capabilities, contributing to its overall revenue streams.
Weibo Financial Statement Overview
Summary
Weibo's financial performance is solid, with strong profitability margins and excellent cash flow management. While revenue growth is a concern, the company's ability to generate cash and maintain a stable balance sheet provides a competitive edge.Income Statement
Weibo's income statement shows stable profitability with a Gross Profit Margin of 78.74% and a Net Profit Margin of 19.46% for 2023. However, the revenue growth rate shows a decline of 4.17% from the previous year, indicating potential challenges in revenue generation. The EBIT Margin is healthy at 26.87%, but the EBITDA Margin has improved significantly to 40.58%, showcasing strong operational efficiency.68
Positive
Balance Sheet
The balance sheet reflects a moderate Debt-to-Equity Ratio of 0.80, indicating manageable leverage. The Return on Equity (ROE) is strong at 10.08%, suggesting efficient use of equity. The Equity Ratio stands at 46.67%, showing a stable financial position with a balanced asset base.72
Positive
Cash Flow
Weibo demonstrates impressive cash flow management with a notable Free Cash Flow growth rate of 73.11% in 2023. The Operating Cash Flow to Net Income Ratio is high at 1.96, and the Free Cash Flow to Net Income Ratio is excellent at 1.86, indicating robust cash generation relative to net income.85
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.74B | 1.76B | 1.84B | 2.26B | 1.69B | 1.77B | Gross Profit |
| 1.37B | 1.39B | 1.44B | 1.85B | 1.39B | 1.44B | EBIT |
| 476.18M | 472.93M | 816.01M | 697.41M | 506.80M | 597.58M | EBITDA |
| 537.41M | 714.45M | 289.91M | 668.74M | 458.99M | 675.06M | Net Income Common Stockholders |
| 291.54M | 342.60M | 85.56M | 428.32M | 313.36M | 494.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.83B | 3.23B | 3.17B | 3.13B | 3.50B | 2.40B | Total Assets |
| 3.27B | 7.28B | 7.13B | 7.52B | 6.34B | 4.80B | Total Debt |
| 884.12M | 2.71B | 2.42B | 2.43B | 2.43B | 1.68B | Net Debt |
| -350.47M | 120.90M | -269.20M | 11.25M | 613.67M | 229.27M | Total Liabilities |
| 1.53B | 3.76B | 3.74B | 3.83B | 3.45B | 2.52B | Stockholders Equity |
| 1.75B | 3.40B | 3.33B | 3.59B | 2.81B | 2.28B |
| Cash Flow | Free Cash Flow | ||||
| 107.35M | 636.05M | 367.40M | 646.39M | 706.82M | 609.91M | Operating Cash Flow |
| 107.35M | 672.82M | 564.10M | 814.02M | 741.65M | 631.65M | Investing Cash Flow |
| 0.00 | -736.85M | -33.01M | -423.96M | -1.21B | -1.20B | Financing Cash Flow |
| 0.00 | 21.69M | -91.14M | 189.44M | 741.96M | 791.87M |
Weibo Technical Analysis
Positive
10.92
Price Trends
10.06
Positive
9.71
Positive
8.98
Positive
Market Momentum
0.12
Positive
56.67
Neutral
65.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WB, the sentiment is Positive. The current price of 10.92 is above the 20-day moving average (MA) of 10.66, above the 50-day MA of 10.06, and above the 200-day MA of 8.98, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 56.67 is Neutral, neither overbought nor oversold. The STOCH value of 65.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WB.
Weibo Risk Analysis
Weibo disclosed 113 risk factors in its most recent earnings report. Weibo reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Weibo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $342.45B | 19.77 | 11.97% | 0.70% | 4.28% | 28.42% | |
80 Outperform | $621.34B | 27.12 | 20.03% | 0.56% | 5.12% | -12.42% | |
79 Outperform | $64.98B | 16.10 | 22.60% | 2.37% | 0.23% | -0.09% | |
79 Outperform | $69.61B | 11.32 | 17.55% | 1.75% | 1.88% | 49.67% | |
74 Outperform | $2.68B | 7.58 | 11.05% | ― | 0.99% | -7.37% | |
71 Outperform | $32.78B | 10.14 | 9.37% | ― | -2.60% | 19.69% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% |
* Communication Services Sector Average
Performance Comparison
WB
Weibo
10.92
2.50
29.69%
BIDU
Baidu
94.80
-6.49
-6.41%
NTES
NetEase
102.78
-0.76
-0.73%
TCEHY
Tencent Holdings
68.64
33.28
94.12%
JD
JD
42.29
16.93
66.76%
BABA
Alibaba
140.62
67.33
91.87%
Weibo Earnings Call Summary
Earnings Call Date: Nov 19, 2024 | % Change Since: 28.32% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Weibo's growth in MAUs and revenue, with significant impacts from the Olympics and strong performance in VAS. However, challenges persist in the consumer market and specific sectors like luxury and real estate. Overall, the highlights slightly outweigh the lowlights.Highlights
Increase in Monthly Active Users (MAU)
In September, Weibo's MAU reached approximately 587 million, and the average daily user count reached approximately 257 million, showing improvement due to a revised user acquisition strategy.
Revenue Growth
Weibo's total revenue in the third quarter reached USD 464.5 million, up 5% year-over-year. Ad revenue was USD 398.6 million, up 2% year-over-year, and VAS revenue reached USD 65.9 million, up 25% year-over-year.
Olympics Impact
The Olympic-related topics on Weibo surpassed 400 billion views with over 400 million discussions. Ad revenue from the Paris Olympics set a historical high for Weibo's event-based sales, significantly surpassing that of the Tokyo Olympics.
Strong VAS Performance
VAS revenue increased by 25%, primarily driven by membership and game-related services, demonstrating robust user demand for value-added services.
Lowlights
Sluggish Consumer Environment
Despite growth in ad revenue, Weibo continues to face a relatively sluggish consumer environment and subdued client marketing demand, affecting expected growth in certain industries.
Ad Revenue Concerns
There is uncertainty in achieving a recovery of ad revenues from luxury products and real estate sectors, indicating challenges in these verticals.
Company Guidance
During the third quarter earnings call for Weibo (9898.HK), the company provided guidance on several key metrics. Weibo's Monthly Active Users (MAU) reached approximately 587 million with Daily Active Users (DAU) at about 257 million, showing an improved DAU to MAU ratio due to a focus on high-quality user acquisition. Total revenue for the quarter was USD 464.5 million, a 5% year-over-year increase, with advertising revenue at USD 398.6 million, up 2%, and Value-Added Services (VAS) revenue at USD 65.9 million, up 25%. The company's non-GAAP operating income was USD 164.5 million, reflecting a non-GAAP operating margin of 35%. The quarter's performance was bolstered by strategic marketing initiatives capitalizing on Olympic trends and product monetization efforts, with the Paris Olympics driving a significant increase in ad revenue compared to previous events.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.