What To Expect From Sina In Q4 And Beyond

Sina (NASDAQ:SINA) is scheduled to report its Q4 and fiscal 2018 results on Tuesday, March 5, before market open. While the stock had been falling due to concerns about the ongoing U.S.-China trade issues, over the last month it rallied by over 10% on hopes of a potential resolution. We expect to hear positive commentary from the company’s management around its outlook for the next fiscal year on the back of Chinese stimulus and easing trade issues.

We maintain our price estimate of $86 per share for Sina, which is now around 25% higher than the current market price. Our interactive dashboard on Sina’s Price Estimate outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation, and see all of our technology company data here.

While competition for Chinese consumer mindshare remains strong, Sina’s has shown sustained growth momentum, albeit down from its earlier scorching pace. While Q3 saw advertising revenue growth of 33% y-o-y on the back of 48% y-o-y growth in Weibo, non-advertising revenue declined by 7% y-o-y due to changes in reporting, lack of growth in fintech businesses and forex headwinds.

Another factor that seemed to have been weighing on the stock was the downward revision of guidance by 5-7%, which the consensus had extrapolated to increase going into 2019. We note that, even if management is able to deliver revenue growth within its revised guidance of 32-34%, the stock would still be trading at a PEG of less than 1x. With the Chinese stimulus likely to rev up domestic demand, and any progress on the U.S.-China trade front likely to allay frayed geopolitical nerves, we expect Sina’s management to guide for a more robust 2019 than many seem to be expecting.

Do not agree with our forecast? Create your own price forecast for Sina by changing the base inputs (blue dots) on our interactive dashboard.