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What Should We Expect From Weibo Corporation's (NASDAQ:WB) Earnings In The Next 12 Months?

Simply Wall St

Looking at Weibo Corporation's (NASDAQ:WB) earnings update in March 2019, analyst forecasts seem fairly subdued, as a 2.5% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 70%. With trailing-twelve-month net income at current levels of US$572m, we should see this rise to US$586m in 2020. Below is a brief commentary around Weibo's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Weibo

Exciting times ahead?

The longer term view from the 21 analysts covering WB is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

NasdaqGS:WB Past and Future Earnings, July 30th 2019

This results in an annual growth rate of 13% based on the most recent earnings level of US$572m to the final forecast of US$795m by 2022. This leads to an EPS of $3.37 in the final year of projections relative to the current EPS of $2.56. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 33% to 31% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Weibo, I've compiled three pertinent aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Weibo worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Weibo is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Weibo? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.