SINA Q3 2013: Profitable But Still Too Expensive

SINA Q3 2013 earnings report

SINA Corp (NASDAQ: SINA), a Chinese internet media company, came out with its Q3 2013 results yesterday (November 12th) after market close. The company reported a strong quarter mainly on account of better monetization of its Weibo platform. SINA stock price is up more than 7% in pre-market trade after gaining over 4% in after-hours trade following the earnings announcement.

Q3 2013 performance: Weibo drives profit margins higher

The company registered topline growth of 21% on a Y/Y basis accompanied by margin expansions in operating income as well as net income margins. The operating margin improved by over 10 percent compared to Q2 2012 while the net income margin saw over 7 percent increase over the year ago quarter. The margin expansion was mainly due to higher margins from the Weibo platform. The impressive growth accompanied by margin expansion lead to a 160% Y/Y increase in the earnings per share (EPS).

SINA Q3 2013 performance

Though the quarterly performance has been phenomenal, the current valuation levels of the company already seem to have accounted for the growing popularity and monetization of the Weibo platform. The current P/E of the company in excess of 1000 as well as a LTM price-to-sales (P/S) multiple of 8 make the stock an extremely risky bet. However we will look forward to any correction in the stock price which could open up investment opportunities in the SINA stock.

To see Sina Corp’s latest stock price movement, click here (NASDAQ: SINA)

Virendra Singh Chauhan Virendra Singh Chauhan   on Amigobulls :

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