I’ve had February 22 circled on my calendar in anticipation of this moment. My favorite Chinese internet stock just reported stunning sales and earnings growth for the fourth quarter.
Weibo (WB) is popularly known as “China’s answer to Twitter.” Weibo is a social media company that allows Chinese users to express themselves, connect with others, discover Chinese-language content and use push notifications on their mobile devices. Weibo also offers online games and mobile apps. Weibo has experienced tremendous growth since its launch in 2010.
As mentioned earlier, the internet company trounced expectations for the fourth quarter. Compared with Q4 2015, net revenues jumped 43% to $212.7 million. Analysts were looking for $206.6 million in revenue, so Weibo posted a 3% earnings surprise. Over the same period, adjusted earnings skyrocketed 134% to $77.0 million, or $0.34 per share. This beat the consensus EPS estimate by 21.4%.
Better yet, Weibo released a bullish outlook for FY 2017. The company expects net revenues to range between $185 million and $190 million, or between 55.5% and 59.7% annual revenue growth. This is also above the Street view of $180.4 million. All-in-all, this was an excellent report.
For the current quarter, analysts are calling for 171.4% earnings growth and 51.2% sales growth. However, given Weibo’s earnings surprise history, I expect it to do even better when it next reports in May. In the meantime, I consider WB an A-rating Strong Buy.