To The Moon

$Weibo(WB)$ is expected to release its quarterly result on 22 August 2024 before market open, and it is expected to show a fall in quarterly revenue.

Weibo is expected to report a 0.7% decrease in revenue to $436.954 million from $440.24 million a year ago.

Consensus estimate for earnings per share is 42 cents.

Concerns Over Weibo (WB) ROCE (Returns On Capital Employed)

Weibo has an ROCE of 11.32%. In absolute terms, that's a low return, but it's much better than the Interactive Media and Services industry average of 6.5%.

Weibo is reinvesting in the business, but returns have been falling. And investors may be expecting the fundamentals to get a lot worse because the stock has crashed 78% over the last five years.

But if we look at the net margin, there is still potential for Weibo to make a recovery if we could see that the earning revenue improved in this upcoming earnings.

Weibo (WB) Price Target Forecast

Based on 5 Wall Street analysts offering 12 month price targets for Weibo in the last 3 months. The average price target is $11.42 with a high forecast of $17.00 and a low forecast of $8.50. The average price target represents a 44.74% change from the last price of $7.89.

Market have been concerned about Weibo fundamental when the capital they have invested have not been showing result, but for communication services companies, we need to understand that the runway might be longer.

What I would be interested is to see the revenue sources that Weibo is getting from as their users base in China is large and still growing even with competition from Tiktok.

Weibo (WB) Year-To-Date Returns

A 20% loss in stock price year to date is a concern for any investors, but if we were to look at from different perspective, would this present an opportunity to buy low and later sell high?

I am expecting Weibo to show some improvement in its earnings per share and some news on the returns on its capital deployed.

Technical (MACD and KDJ)

From the technical, we could see that market is not expecting any upside movement from Weibo, or rather is trading sideway for the past few days prior to its earnings.

MACD is converging to exit the upside trend and KDJ is showing a downside move. But I do expect Weibo to show some small improvement in its earnings and their guidance for 2024 on their returns on capital should be positive.

This should help to push Weibo near $8.50.

Summary

I am expecting Weibo to provide a slightly better earnings per share and also their guidance on their ROCE should be positive. Hence I would be watching closely during pre-market to see if can get a price target for a buy.

Appreciate if you could share your thoughts in the comment section whether you think Weibo would make a reverse from market expectation of a lower earnings?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.