Weibo Corp (ADR) (NASDAQ:WB) the Chinese microblogging site that in some circles has come to be known as the “successful Twitter Inc (NASDAQ:TWTR),” reported earnings Wednesday and blew away estimates on both the earnings and revenue fronts.
Its parent, SINA Corp (NASDAQ:SINA), also came in with great numbers — like revenue up 80% compared to the same quarter last year.
So it was a pleasant surprise to see WB sell off Thursday. I say pleasant because it gave up a great opportunity to buy into this Chinese social media juggernaut.
Part of Weibo’s success has been the synergies it has been able to deliver regarding its two major investors, SINA and Alibaba Group Holding Ltd (NASDAQ:BABA). Where Twitter built out on its own, WB has found a way to deliver added value to other online firms, whether they’re retailers or social media companies.
WB also has been very nimble, add features like video and dynamic advertising to keep the platform relevant. It also has the advantage of being a Chinese company attracting a Chinese audience, which across Asia, is probably close to a 2 billion person potential market. Twitter never found that kind of reach.
That’s why you have to look as this dip as a great opportunity. Even if it’s just a ‘buy the rumor, sell the news’ kind of thing, it’s a gift. Earnings for the quarter came in almost 25% higher than analysts expectations and revenue was up nearly 43% year over year.
These are very impressive numbers. And they are not new. WB has been growing like this for a while now. And given its rock solid position in the Chinese social media market, you can see WB more as a Facebook Inc (NASDAQ:FB) corollary than a TWTR. Even its two-letter Nasdaq ticker is likely an homage to FB.
There has been talk that BABA may decide to swallow WB at some point. But even if it did, it would surely have to pay a significant premium to get a controlling interest in WB, given the latter’s continued strong performance.
WB also is a major player in the mobile space as well, with 90% of its users on mobile devices. As 5G technology starts to get deployed around the world, this will bring even more opportunity for WB.
Right now, WB is just getting its hands around the Chinese advertising opportunities. It still has Western firms that are looking for brand exposure in China as potential customers.
The bottom line is, WB’s top line continues to grow by leaps and bounds. And no one is predicting this growth to stop any time soon. That makes this pull back a great opportunity to buy one of the world’s top growth stocks at a very attractive price.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.