Weibo Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that Weibo Corporation (NASDAQ:WB) released its quarterly result to the market. The early response was not positive, with shares down 5.4% to US$7.77 in the past week. It looks like a credible result overall - although revenues of US$438m were what the analysts expected, Weibo surprised by delivering a (statutory) profit of US$0.43 per share, an impressive 31% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Weibo

Taking into account the latest results, Weibo's 23 analysts currently expect revenues in 2024 to be US$1.72b, approximately in line with the last 12 months. Statutory per share are forecast to be US$1.31, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.78b and earnings per share (EPS) of US$1.35 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 7.6% to US$10.64. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Weibo analyst has a price target of US$17.00 per share, while the most pessimistic values it at US$7.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 2.3% annualised decline to the end of 2024. That is a notable change from historical growth of 0.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. It's pretty clear that Weibo's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Weibo going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Weibo that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.