Is Weibo Corporation (WB) positioned for future growth?

Weibo Corporation (NASDAQ: WB) stock jumped 0.09% on Tuesday to $22.30 against a previous-day closing price of $22.28. With 0.85 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.64 million shares. During the session, the Internet Content & Information company that operates in wider Communication Services sector, reached to the highest price of $22.46 whereas the lowest price it dropped to was $22.01. The 52-week range on WB shows that it touched its highest point at $35.16 and its lowest point at $10.02 during that stretch. It currently has a 1-year price target of $22.01. Beta for the stock currently stands at 0.46.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of WB was up-trending over the past week, with a rise of 7.57%, but this was up by 20.09% over a month. Three-month performance surged to 82.04% while six-month performance rose 12.40%. The stock lost -33.35% in the past year, while it has gained 16.63% so far this year. A look at the trailing 12-month EPS for WB yields 0.26 with Next year EPS estimates of 2.21. For the next quarter, that number is 0.52. This implies an EPS growth rate of 35.20% for this year and 7.30% for next year. EPS is expected to decline by -7.85% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 30.90%.

Float and Shares Shorts:

At present, 235.89 million WB shares are outstanding with a float of 139.47 million shares on hand for trading. On Oct 13, 2022, short shares totaled 8.73 million, which was 3.69% higher than short shares on Sep 14, 2022. In addition to Mr. Gaofei Wang as the firm’s CEO & Director, Ms. Fei Cao serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 43.91% of WB’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 28.67% of WB, in contrast to 16.43% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in WB with 6.06% of the stake, Alibaba Group Holding Ltd. holds 9,000,000 shares worth 9,000,000. A second-largest stockholder of WB, Allspring Global Investments LLC, holds 5,070,650 shares, controlling over 3.42% of the firm’s shares. ARGA Investment Management LP is the third largest shareholder in WB, holding 4,576,475 shares or 3.08% stake. With a 2.25% stake in WB, the KraneShares CSI China Internet ET is the largest stakeholder. A total of 3,332,613 shares are owned by the mutual fund manager. The Hermes Invt. Funds – Asia, which owns about 1.93% of WB stock, is the second-largest Mutual Fund holder. It holds 2,872,018 shares valued at 54.91 million. Allspring Emerging Markets Equity holds 1.50% of the stake in WB, owning 2,221,212 shares worth 42.47 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for WB since 28 analysts follow the stock currently. There are 17 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With WB analysts setting a high price target of $27.10 and a low target of $15.00, the average target price over the next 12 months is $21.47. Based on these targets, WB could surge 21.52% to reach the target high and fall by -32.74% to reach the target low. Reaching the average price target will result in a decline of -3.72% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. WB will report FY 2022 earnings on 02/29/2024. Analysts have provided yearly estimates in a range of $2.36 being high and $1.94 being low. For WB, this leads to a yearly average estimate of $2.09. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Weibo Corporation surprised analysts by -$0.03 when it reported $0.50 EPS against a consensus estimate of $0.53. The surprise factor in the prior quarter was $0.03. Based on analyst estimates, the high estimate for the next quarter is $0.62 and the low estimate is $0.46. The average estimate for the next quarter is thus $0.53.

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