SINA Corporation SINA is expected to report fourth-quarter 20Array5 results on Mar 2. Last quarter, it posted a positive surprise of 87.50%. However, the company posted an average negative surprise of ArrayArrayArray.46% over the trailing four quarters.
Let’s see how things are shaping up for this announcement.
Factors at Play
We believe that SINA has a decent product pipeline and its investments in product development and marketing are the positives. Also, the user base for its e-Commerce and Weibo offerings remains strong.
Investments in mobile and video are likely to ensure long-term growth, however, at the cost of near-term profitability.
Additionally, SINA’s business may be affected by significant restrictions on online search and other social-networking activities in China. In fact, slowdown in the Chinese economy poses significant threat and can substantially weigh on the company’s financials.
Moreover, Weibo is expected to face stiff competition from the likes of WeChat in China, which will hurt its user base. We believe that Weibo’s monetization ability will be a major driving factor for SINA amid intensifying competition from the likes of Sohu.com Inc., NetEase and Youku Tudou in the video and brand advertising market.
Earnings Whispers
Our proven model does not conclusively show that SINA is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #Array (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: SINA has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at ArrayArray cents.
Zacks Rank: SINA has a Zacks Rank #3 which, when combined with a 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here’s a stock that you may want to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter
NeoPhotonics Corporation NPTN, with an Earnings ESP of +Array2.50% and a Zacks Rank #Array.
Superior Industries International, Inc. SUP, which has an Earnings ESP of +ArrayArray.ArrayArray% and a Zacks Rank #Array
Casey's General Stores, Inc. CASY, which has an Earnings ESP of +Array0.ArrayArray% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment