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Weibo Corp ADR - Stock Quote WB

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Morningstar's Weibo Corp ADR Stock Analysis

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Weibo’s Strong Start to 2022 Overshadowed by Macroeconomic Concerns; Shares Undervalued

Ivan Su Senior Equity Analyst

Analyst Note

| Ivan Su |

Narrow-moat Weibo reported first-quarter results with top and bottom lines tracking within our full-year estimates. However, the firm's excellent start to 2022 is overshadowed by China's macroeconomic concerns. Widespread lockdowns have led advertisers in fast-moving consumer goods, or FMCG, e-commerce, and auto industries to pull back their spending on Weibo's platform. Given that advertisers in these three categories represent about 50% of the firm's ad revenue, we expect earnings to be weak in the second quarter. While our base case assumes year-over-year revenue growth to return in the third quarter, we also acknowledge the risk of more lockdowns, which could further delay the recovery in consumption and advertising spending. Our long-term forecasts and fair value estimate of $32.20 remain intact despite near-term uncertainties. As of June 2, we view Weibo shares as undervalued.

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Weibo Corp ADR's Company Profile

Business Description

Weibo is the largest social media platform in China. As of 2020, Weibo had 521 million monthly active users and 225 million daily active users, many of whom are drawn there by the millions of key opinion leaders in entertainment, sports, and business circles. Sina is the major shareholder, holding 44.7% of shares and with 70.8% voting power; Alibaba holds 29.8% of shares and 15.7% voting power.

No. 8 Xinyuan S. Road, 8th Floor, QIHAO Plaza
Beijing, 100027, China, People's Republic of
T +86 1058983095
Industry Internet Content & Information
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type
Employees 6,147