Weibo Recovery Still In The Works Due To Soft Ad Revenue, Analyst No Longer Bullish
Portfolio Pulse from Priya Nigam
Weibo Corp (NASDAQ:WB) experienced a softer than expected recovery in advertising revenues in 2023, leading to a downgrade by Goldman Sachs from Buy to Neutral and a reduction in price target from US$17.10 to US$10.60. The downgrade is attributed to weaker household consumption, stiff content competition, and structural wallet share loss to SFVs. Higher investments in vertical content are expected to pressure sales and margins in 2024, with ad revenue growth projected at 3-4% yoy in 2024 or 3% CAGR in 2023-26. Shares of Weibo declined by 1.79% to $9.33.
March 28, 2024 | 3:20 pm
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NEGATIVE IMPACT
Weibo Corp downgraded by Goldman Sachs from Buy to Neutral with a price target cut from US$17.10 to US$10.60 due to softer ad revenue recovery and increased competition.
The downgrade by Goldman Sachs reflects concerns over Weibo's ad revenue recovery and competitive pressures, which are likely to impact investor sentiment negatively. The reduction in price target and the downgrade to Neutral signal a less optimistic outlook for Weibo's financial performance, potentially leading to a decrease in stock price in the short term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100