On Nov 13, 2013, Zacks Investment Research upgraded SINA Corp. (SINA) to a Zacks Rank #1 (Strong Buy). With a strong return of 61.3% over the past one year and a positive estimate revision trend, SINA is an attractive investment opportunity.
Why the Upgrade?
Upbeat third quarter results and strength in Weibo contributed to the upgrade. Weibo’s daily active user (:DAU) base increased 11.2% to 60.2 million from the month of June to September. This was much better than 8.2% growth reported during the March-June period.
SINA reported third quarter earnings of 35 cents per share that were well ahead of the Zacks Consensus Estimate of 17 cents and the year-ago figure of 8 cents. SINA’s partnership with the Alibaba group contributed significantly to the company’s overall results.
Revenues surged 21.2% year over year to $184.6 million and exceeded the Zacks Consensus Estimate of $181.0 million. The year-over-year growth in revenues was primarily driven by higher revenues from online advertising and fee-based services. Advertising revenues moved up 25.7% from the year-ago quarter to $151.6 million.
SINA expects revenues for the fourth quarter of 2013 to be in the range of $190.0 million and $194.0 million. Advertising revenues are expected in the range of $160.0 million–$162.0 million, while non-advertising revenues are projected in the range of $30.0 million–$32.0 million.
The Zacks Consensus Estimate for fiscal 2013 increased 33.3% to 8 cents per share as most of the estimates were revised higher over the last 60 days. For fiscal 2014, the Zacks Consensus Estimate increased 19.3% to $1.42 per share.
The long-term expected earnings growth rate for SINA is 22.5%.
Other Stocks to Consider:
Investors can also consider other stocks that are doing well right now. These include Qihoo 360 Technology (QIHU), Digital River (DRIV) and Facebook (FB). While Qihoo and Digital River carry a Zacks Rank #1 (Strong Buy), Facebook carries a Zacks Rank #2 (Buy).