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Tencent Holding (TCEHY) Gains But Lags Market: What You Should Know

Zacks Equity Research
Globe Specialty Metals (GSM) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Tencent Holding (TCEHY) closed the most recent trading day at $42.90, moving +0.63% from the previous trading session. This change lagged the S&P 500's 0.76% gain on the day. Meanwhile, the Dow gained 0.67%, and the Nasdaq, a tech-heavy index, added 0.71%.

Coming into today, shares of the company had gained 12.49% in the past month. In that same time, the Computer and Technology sector lost 0.35%, while the S&P 500 gained 0.75%.

TCEHY will be looking to display strength as it nears its next earnings release, which is expected to be March 20, 2019. On that day, TCEHY is projected to report earnings of $0.28 per share, which would represent no growth from the year-ago period. Meanwhile, our latest consensus estimate is calling for revenue of $12.31 billion, up 21.13% from the prior-year quarter.

Investors should also note any 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TCEHY currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that TCEHY has a Forward P/E ratio of 30.89 right now. Its industry sports an average Forward P/E of 27.07, so we one might conclude that TCEHY is trading at a premium comparatively.

Investors should also note that TCEHY has a PEG ratio of 0.97 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TCEHY's industry had an average PEG ratio of 2.25 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 82, putting it in the top 33% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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