SINA Corporation (SINA) is an online media company and our Bear of the Day after it recently became a Zacks Rank #5 (Strong Sell). Sina operates four major business segments: Sina Weibo, Sina Mobile, Sina Online, and Sina.net. The company has been labeled “The Twitter of China” as it’s a similar micro-blogging site that has more than 500 million users.
Sina has a market cap of $3.2 Billion with a Forward PE of 177 and pays no dividend. The stock sports Zacks Style Scores of “D” in Growth, “F” in Value, and has a VGM score of “F”.
The company resides in an industry ranked 102 out of 265 (Top 38%) of the Zacks Industry Rank. However, estimate revisions show the company isn’t living up to industry standards.
Estimates Revisions
The chart below shows us that recent revisions have been to the downside. Over the last 30 days, estimates have fallen from -$0.07 to -$0.12 for the current quarter. For fiscal year 2016, we see estimates revised 32% lower, to $0.27 from $0.40. Furthermore, analysts have been in 100% agreement with four out of four analysts revising to the downside. These revisions suggest the company is struggling to monetize its platform, a similar problem Twitter (TWTR) has had.
Earnings and Guidance
The company reported Q4 earnings on March 2nd with the topline coming in at $253.6 Million verse the $243 Million expected. EPS came in as a miss at $0.35 versus the $0.37 expected. Fiscal year 2016 revenue guidance was a disappointment, with the company seeing $850-950 Million in revenue versus the $950 Million expected. This number assumes a RMB currency depreciation versus the US dollar at an average rate of 8.5% in 2016.
Sina next reports earnings on May 12th. Based on lower estimate revisions, look for the downward trend in EPS and guidance to continue.
A Better Option
WebMD Health (WBMD) is a Zacks Rank #2(Buy) that provides health information services to consumers, physicians and other healthcare professionals. The company aims to provide valuable health information, tools for managing your health, and support to those who seek information.
WebMD has a market cap of $2.3 Billion and a Forward PE of 33. The company sports a Zacks Style Score of “B” in growth, but “D” in value. The valuation is in question and short sellers have piled in the stock with 19% of the float short. However, the stock is bumping up against all-time highs and looks to squeeze the shorts before the company reports earnings on May 4th.
On February 23rd the company reported Q4 earnings of $0.60 a share versus the $0.57 expected. Revenue came in slightly higher for the quarter at $192 Million versus the $191 expected. In addition, the company went on to guide fiscal year 2016 revenue $685-705 Million versus $694 Million. Traffic on the website reached 201 million unique users per month, generating almost 4 billion page views for the quarter, increases of 6% and 7% from the prior year period.
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