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Tencent Holding (TCEHY) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Tencent Holding (TCEHY) closed the most recent trading day at $49.30, moving -1.77% from the previous trading session. This change lagged the S&P 500's daily loss of 0.06%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, lost 0.1%.

Coming into today, shares of the company had gained 10.31% in the past month. In that same time, the Computer and Technology sector gained 5.14%, while the S&P 500 gained 4.3%.

Wall Street will be looking for positivity from TCEHY as it approaches its next earnings report date. In that report, analysts expect TCEHY to post earnings of $0.34 per share. This would mark year-over-year growth of 13.33%. Our most recent consensus estimate is calling for quarterly revenue of $13.30 billion, up 15.08% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.46 per share and revenue of $59.81 billion. These totals would mark changes of +24.79% and +26.6%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for TCEHY. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.41% higher. TCEHY currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, TCEHY is holding a Forward P/E ratio of 34.3. This valuation marks a premium compared to its industry's average Forward P/E of 25.81.

Meanwhile, TCEHY's PEG ratio is currently 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TCEHY's industry had an average PEG ratio of 3.34 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 166, putting it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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