Stock (Symbol) |
Weibo (WB) |
Stock Price |
$50 |
Sector |
| Technology |
Data is as of |
| April 13, 2017 |
Expected to Report |
| May 9 |
Company Description |
 Weibo Corporation is a social media platform for people to create, distribute and discover Chinese-language content. The Company provides ways for people and organizations to publicly express themselves in real time, interact with others on a global platform and stay connected with the world. Source: Thomson Financial |
Sharek’s Take |
 Weibo (WB), which is referred to as the Twitter of China, continues to deliver triple-digit profit growth. Weibo was created by Chinese web company Sina in 2009, then spun off as an IPO in April 2014. Sina still owns a large portion of WB shares, as does Alibaba, which is a key advertiser for Weibo. WB is one of the fastest growing publicly traded companies in the world. Profits have gone from nothing in 2014 to $0.32 in 2015 and $0.82 last year. What’s more is the triple-digit growth continues today. WB delivered 127% profit growth last qtr and analysts expect 200% profit growth this qtr with 81% growth 2QtrsOut. That could mean another two qtrs of triple-digit growth ahead. Why is triple-digit growth important? Great stock market winners like Dell and Qualcomm had growth like that when they made stratospheric runs higher. The next big source of revenue growth for Weibo, thus easier creation and consumption of short videos is a top priority for management this year. Not only is Weibo delivering the growth, the stock is undervalued as well. My Fair Value is $80 this year and $116 in 2018. WB has doubled in a year and could double again within the next two years. This is a premier growth stock to own, and it’s reasonably priced with a P/E of 38. With tech stocks breaking out, I expect WB to follow suit shortly. |
One Year Chart |
 I love the triple-digit growth along the bottom. What’s not shown here is these estimates got upped along the way then the company beat at the end — another key characteristic of Superstar stocks. Weibo delivered 127% profit growth on 43% sales growth last qtr, and management upped sales guidance for NxtQtr (then analysts upped profit estimates). Overall, qtrly Estimates for the next 4 qtrs are 200%, 81%, 46% and 32%. I feel the triple-digit growth could continue two more qtrs, then slow after that. The Est. LTG of 64% per year is outstanding, and the P/E of 38 is less than the 42 P/E the stock had last year before it doubled. |
Fair Value |
 Although WB had a median P/E of 41 last year the P/E was 72 when I did my 2017 Q3 report later in the year. My Fair Value is 60x earnings which is $80 this year and $116 next year but estimates have increased the last 4 qtrs (2017 from $0.93 to $1.33) so I could be upping these profit figures in future qtrs. |
Bottom Line |
 Weibo is a top tier growth stock. The shares doubled in price last year, but now are building a constructive base from which it could taker off from again. With Internet stocks breaking out and rising higher, I feel WB will follow suit. Triple-digit growth often causes stocks to surge higher, and WB has been delivering that for years. WB ranks 4th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
4 of 28Aggressive Growth Portfolio 4 of 15Conservative Stock Portfolio N/A |
