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Weibo (WB)
NASDAQ:WB
Top Page
(NASDAQ:WB)
Rating:75Outperform
Price Target:
$11.50
▲(12.97%Upside)
Positive Factors
AI Integration
Management highlighted early positive impacts from AI integration, such as improved user engagement, search usage, and ECPM, though broader adoption is still in the early stages.
Financial Performance
Weibo's non-GAAP EPS came in at $0.45, beating expectations by $0.07.
Operational Efficiency
Weibo improved operational efficiency, with non-GAAP operating margins rising to 33%, largely due to reduced sales and marketing expenses.
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.
Competitive Pressure
We expect the company to continue losing market share in the advertising space, and as a result, maintain a Hold rating on the stock.
Market Share
Analyst views the company as an industry tracker at best and likely to continue losing share.
Weibo (WB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.50B
Dividend Yield8.06%
Average Volume (3M)836.09K
Price to Earnings (P/E)7.5
Beta (1Y)0.49
Revenue Growth0.83%
EPS Growth22.06%
CountryUS
Employees4,982
SectorCommunication Services
Sector Strength71
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.45
Shares Outstanding156,449,480
10 Day Avg. Volume936,939
30 Day Avg. Volume836,088
Financial Highlights & Ratios
PEG Ratio0.34
Price to Book (P/B)0.70
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit2.25
Enterprise Value/Ebitda1.48
Forecast
1Y Price Target
$8.50Price Target Upside-16.50% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering2
Weibo Business Overview & Revenue Model
Company DescriptionWeibo Corporation (WB) is a leading social media platform in China, often referred to as the Chinese equivalent of Twitter. Launched in 2009, Weibo operates as a microblogging website that allows users to post, share, and interact with content similar to tweets. It serves a diverse user base, including individuals, celebrities, businesses, and media outlets. Weibo offers a range of services, including real-time interactions, multimedia sharing, and a platform for public discussions, making it a vital part of China's social media landscape.
How the Company Makes MoneyWeibo generates revenue primarily through advertising and marketing services. The company offers a variety of advertising solutions such as display advertisements, promoted feeds, and video ads, targeting both large enterprises and small businesses aiming to reach Weibo's extensive user base. Additionally, Weibo earns from value-added services like VIP membership subscriptions, virtual currency sales for use in games and gifting, and live streaming features. Strategic partnerships, such as collaborations with e-commerce platforms and media companies, further enhance its monetization capabilities by integrating social commerce and content-driven marketing solutions.
Weibo Earnings Call Summary
Earnings Call Date:May 21, 2025
(Q1-2025)
| % Change Since: 20.90%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a stable performance with promising growth in user engagement and certain advertising verticals, particularly during the Spring Festival. However, challenges in key revenue sectors like gaming and handset, along with flat overall revenue growth, indicate areas of concern. The integration of AI technologies shows potential but has yet to significantly boost advertising revenue.Q1-2025 Updates
Positive Updates
Stable User Growth
Weibo's MAUs reached 591 million and average DAUs reached 261 million, with a net addition of 3 million and 6 million users year-over-year, respectively.
Improvement in Operating Margin
Non-GAAP operating income reached $129.5 million, representing a non-GAAP operating margin of 33%, up from 32% in the same period last year.
Spring Festival Campaign Success
The Spring Festival Gala-related topics surpassed 60 billion impressions and discussions exceeded 500 million, representing a 50% increase year-over-year.
Ad Revenue Growth in Key Verticals
Robust growth in advertising revenues from e-commerce, Internet services, and automobile sectors, with double-digit growth in spring festival-related ad revenue.
AI Integration Enhances Search Capabilities
Integration of DeepSeek and other AI models into Weibo's search led to a significant improvement in search capabilities, with MAUs of intelligent search surpassing 30 million.
Negative Updates
Flat Revenue Growth
Total revenues for Q1 2025 were $396.9 million, flat year-over-year and only a 1% increase on a constant currency basis.
Challenges in Gaming and Handset Sectors
The online gaming sector faced a year-over-year decline due to a high base effect and a decrease in new game launches. The handset sector also saw a decline in ad revenue due to shifts in product launch timelines.
Limited Impact of AI on Advertising Revenue
While AI integration improved CTR rates by 10%, the overall impact on advertising revenue, especially from information feeds, was limited.
Company Guidance
In the first quarter of 2025, Weibo reported a total revenue of $396.9 million, which was flat year-over-year or up 1% on a constant currency basis. The company's advertising revenue also remained steady at $339.1 million, while value-added service revenues grew by 2% to $57.7 million. Weibo's non-GAAP operating income reached $129.5 million, representing a non-GAAP operating margin of 33%. User engagement metrics showed positive trends, with monthly active users (MAUs) reaching 591 million and daily active users (DAUs) at 261 million, reflecting year-over-year growth. The company emphasized its focus on enhancing user experience and engagement through integrating large language models and investing in vertical and video content ecosystems. Additionally, Weibo saw substantial growth in interaction efficiency and search satisfaction, with AI-related topics gaining traction on the platform, contributing to a better understanding and acceptance of AI among its user base.Weibo Financial Statement Overview
Summary
Weibo's financial performance shows strong profitability and stable balance sheet, but recent cash flow challenges are concerning. Income statement and balance sheet scores are relatively high, with effective cost management and manageable leverage. However, cash flow issues need attention, lowering the overall financial performance score.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.72
Positive
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.65
Positive
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.45
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.75B | 1.76B | 1.84B | 2.26B | 1.69B |
| Gross Profit | 1.39B | 1.39B | 1.44B | 1.85B | 1.39B |
| EBITDA | 619.03M | 714.45M | 289.91M | 668.74M | 458.99M |
| Net Income | 300.80M | 342.60M | 85.56M | 428.32M | 313.36M |
Balance Sheet | |||||
| Total Assets | 6.50B | 7.28B | 7.13B | 7.52B | 6.34B |
| Cash, Cash Equivalents and Short-Term Investments | 2.35B | 3.23B | 3.17B | 3.13B | 3.50B |
| Total Debt | 1.91B | 2.71B | 2.42B | 2.43B | 2.43B |
| Total Liabilities | 2.93B | 3.76B | 3.74B | 3.83B | 3.45B |
| Stockholders Equity | 3.48B | 3.40B | 3.33B | 3.59B | 2.81B |
Cash Flow | |||||
| Free Cash Flow | 578.43M | 636.05M | 367.40M | 646.39M | 706.82M |
| Operating Cash Flow | 639.90M | 672.82M | 564.10M | 814.02M | 741.65M |
| Investing Cash Flow | -246.90M | -736.85M | -33.01M | -423.96M | -1.21B |
| Financing Cash Flow | -1.03B | 21.69M | -91.14M | 189.44M | 741.96M |
Weibo Technical Analysis
Positive
10.18
Price Trends
9.58
Positive
9.06
Positive
8.88
Positive
Market Momentum
0.22
Negative
57.30
Neutral
41.81
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 10.18 is above the 20-day moving average (MA) of 9.95, above the 50-day MA of 9.58, and above the 200-day MA of 8.88, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 57.30 is Neutral, neither overbought nor oversold. The STOCH value of 41.81 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $26.06B | 13.99 | 48.41% | ― | 17.81% | 1175.52% | |
76 Outperform | $31.66B | 9.00 | 9.85% | ― | -1.33% | 32.92% | |
75 Outperform | $2.50B | 7.53 | 10.79% | 8.06% | 0.83% | 22.06% | |
75 Outperform | $27.97B | 234.53 | 5.77% | ― | 64.12% | ― | |
72 Outperform | $30.08B | 24.87 | 14.37% | 0.83% | 4.59% | 83.27% | |
66 Neutral | $16.19B | ― | -23.97% | ― | 14.91% | 59.90% | |
62 Neutral | $41.98B | -1.92 | -12.06% | 3.47% | 2.10% | -71.01% |
* Communication Services Sector Average
Performance Comparison
WB
Weibo
10.18
3.30
47.97%
BIDU
Baidu
89.40
0.66
0.74%
SNAP
Snap
9.69
-3.40
-25.97%
TME
Tencent Music Entertainment Group
21.60
7.87
57.32%
PINS
Pinterest
38.52
1.17
3.13%
RDDT
Reddit Inc Class A
151.60
93.16
159.41%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.