Weibo (WB) AI Stock Analysis

• Market Cap: $2.10B
• Dividend Yield: 9.41%
• Average Volume (3M): 1.55M
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.62
• Revenue Growth: -0.29%
• EPS Growth: -12.84%
• Country: US
• Employees: 4,982
• Sector: Communication Services
• Sector Strength: 84
• Industry: Internet Content & Information
• EPS (TTM): 0.40
• Shares Outstanding: 156,449,480
• 10 Day Avg. Volume: 919,656
• 30 Day Avg. Volume: 1,549,897
• PEG Ratio: -0.34
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 1.57
• Enterprise Value/Ebitda: 1.02
• 1Y Price Target: $11.83
• Price Target Upside: 39.67% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Weibo's overall stock score benefits from strong profitability and an attractive valuation. While there are challenges in cash flow management and advertising revenue, the company's stable financial leverage and strategic focus on AI integration offer positive prospects. Technical indicators suggest some caution, with potential overbought conditions.

Positive Factors

AI Integration

Management highlighted early positive impacts from AI integration, such as improved user engagement, search usage, and ECPM, though broader adoption is still in the early stages.

Dividend Policy

Weibo announced an annual dividend policy with an annual payout of US$200mn for FY24, translating into an approximately 8% dividend yield.

Earnings

Non-GAAP net income grew by 40% YoY to US$107mn, 9% ahead of consensus estimate, mainly attributable to effective opex control.

Negative Factors

Advertising Revenue

Overall ad demand remained under pressure, with advertising and marketing revenue declining by 3% YoY to US$386mn on a constant currency basis in 4Q24.

Consumer Spending

Management noted consumer spending sentiment remains soft and recent government supportive measures will take time to turn around the economy and consumption.

Market Competition

Competition may hinder WB's ability to grow at an industry-leading level, potentially resulting in market share losses.

Weibo Business Overview & Revenue Model

Company Description

Weibo Corporation, through its subsidiaries, operates as a social media platform for people to create, distribute, and discover content in the People's Republic of China. It operates in two segments, Advertising and Marketing Services; and Value-Added Services. The company offers discovery products to help users discover content on its platform; self-expression products that enable its users to express themselves on its platform; and social products to promote social interaction between users on its platform. It also provides advertising and marketing solutions, such as social display advertisements; and promoted marketing offerings, such as Fans Headline and Weibo Express, as well as promoted trends and search products that appear alongside user's trends discovery and search behaviors. In addition, the company offers products, such as trends, search, video/live streaming, and editing tools; content customization, copyright contents pooling, and user interaction development; and search list recommendation, trends list recommendation, and Weibo app opening advertisements. Further, it provides back-end management, traffic support, and product solutions to MCNs, unions, and e-commerce partners; open application platform for other app developers that allows users to log into third-party applications with their Weibo account for sharing third-party content on its platform; and Weibo Wallet, a product that enables platform partners to conduct interest generation activities on Weibo, such as handing out red envelops and coupons. The company was formerly known as T.CN Corporation and changed its name to Weibo Corporation in 2012. The company was founded in 2009 and is headquartered in Beijing, China. Weibo Corporation is a subsidiary of Sina Corporation.

How the Company Makes Money

Weibo primarily generates revenue through advertising services. The company offers a suite of advertising solutions that allow businesses and marketers to reach a vast audience via promoted feeds, display ads, and social display ads. Key revenue streams include brand advertising and performance-based advertising, which are tailored to meet the needs of different advertisers. Additionally, Weibo earns revenue from value-added services such as VIP membership subscriptions, which offer users enhanced features. Strategic partnerships, particularly with Alibaba, enhance its advertising capabilities by leveraging data analytics and e-commerce integrations, contributing significantly to its earnings.

Weibo Financial Statement Overview

Summary

Weibo shows strong profitability with healthy margins and stable financial leverage. However, recent challenges in cash flow management present potential risks. Financial stability is evident through a solid balance sheet, but effective cash flow management is crucial moving forward.

Income Statement

Weibo's income statement reveals stable revenue with a slight decline in 2024 compared to 2023, yet gross profit margins remain strong at approximately 79%, indicating effective cost management. The net profit margin improved to 17.1% in 2024 from 19.4% in 2023, showcasing effective cost control and operational efficiency despite lower net income. The EBIT and EBITDA margins are healthy, suggesting robust operating performance.

Balance Sheet

Weibo maintains a solid balance sheet with a manageable debt-to-equity ratio of 0.53 in 2024, showing prudent financial leverage. The equity ratio is strong at 53.5%, indicating financial stability. The return on equity is at a moderate level of 8.6%, reflecting the company's ability to generate returns from its equity base.

Cash Flow

The cash flow statement for Weibo illustrates challenges, with zero reported operating and free cash flow in 2024, potentially impacting liquidity. In previous years, free cash flow was positive, indicating that recent cash flow issues might be temporary. The operating cash flow to net income ratio was favorable in prior years, reflecting efficient cash generation historically.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.75B	1.76B	1.84B	2.26B	1.69B
	Gross Profit
1.39B	1.39B	1.44B	1.85B	1.39B
	EBIT
494.32M	472.93M	816.01M	697.41M	506.80M
	EBITDA
619.03M	714.45M	289.91M	668.74M	458.99M
	Net Income Common Stockholders
300.80M	342.60M	85.56M	428.32M	313.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.35B	3.23B	3.17B	3.13B	3.50B
	Total Assets
6.50B	7.28B	7.13B	7.52B	6.34B
	Total Debt
1.91B	2.71B	2.42B	2.43B	2.43B
	Net Debt
14.89M	120.90M	-269.20M	11.25M	613.67M
	Total Liabilities
2.93B	3.76B	3.74B	3.83B	3.45B
	Stockholders Equity
3.48B	3.40B	3.33B	3.59B	2.81B
Cash Flow		Free Cash Flow
578.43M	636.05M	367.40M	646.39M	706.82M
	Operating Cash Flow
639.90M	672.82M	564.10M	814.02M	741.65M
	Investing Cash Flow
-246.90M	-736.85M	-33.01M	-423.96M	-1.21B
	Financing Cash Flow
-996.06M	21.69M	-91.14M	189.44M	741.96M

Weibo Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.47
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WB, the sentiment is Neutral. The current price of 8.47 is above the 20-day moving average (MA) of 8.36, below the 50-day MA of 8.47, and above the 200-day MA of 8.34, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 52.11 is Neutral, neither overbought nor oversold. The STOCH value of 25.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WB.

Weibo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	78 Outperform	$24.64B	19.41	14.37%	1.05%	4.59%	83.27%
PINS	77 Outperform	$22.04B	11.83	48.41%	―	17.81%	1175.52%
BIDU	77 Outperform	$31.74B	9.74	9.14%	―	-2.60%	16.71%
RDDT	72 Outperform	$19.93B	167.06	5.77%	―	64.12%	―
WB	68 Neutral	$2.10B	7.31	8.74%	9.41%	-0.29%	-12.84%
SNAP	66 Neutral	$14.62B	―	-23.97%	―	14.91%	59.90%
Sector *	60 Neutral	$14.09B	6.90	-3.35%	3.68%	2.44%	-36.27%