Qunar Cayman Islands (QUNR) is expected to report its fiscal 4Q15 earnings on March 21, 2016. The quarter ended on December 31, 2015.
According to Bloomberg consensus, of the 12 analysts tracking Qunar, six analysts (50%) have a “buy” recommendation on the stock, five (41.7%) have a “hold” rating, and one (8.3%) has a “sell” rating.
Most analysts have maintained their rating for QUNR since the last results. Only one analyst, Henry Guo of Summit Research Partners, has downgraded QUNR’s rating to neutral.
It’s important to be aware of analyst recommendations or changes to recommendations, as they can significantly affect the company’s stock price. Changes to a popular analyst’s view can cause a significant short-term movement in the stock price.
Qunar’s consensus 12-month target price is $47.50, which indicates a 31.1% return potential as of March 4, 2016. Morgan Stanley’s Amanda Chen has the highest target price of $54 and has maintained the “overweight” rating. Chen Haofei of China International Capital has also maintained the “buy” rating with a slightly lower price target of $50. Wendy Huang of Macquarie and Roger Gu of SWS Research have the lowest target price of $35, with a “sell” rating on the stock.
For 2016, analysts estimate that Qunar’s sales will grow by 71% to ~$1 billion, compared to a 117% growth expected for 2015. Its 2016 EBITDA (earnings before interest, tax, depreciation, and amortization) is expected to remain at -$105 million compared to -$316 million expected in 2015.
In the next few articles, we’ll look at what led to these estimates. This should help investors judge if analysts are being optimistic or conservative on the stock. We’ll also see what may be priced into the stock.
You can also read our 4Q15 post-earnings analysis for QUNR’s competitors Priceline (PCLN), TripAdvisor (TRIP), and Expedia (EXPE) and a pre-earnings analysis for Ctrip.com (CTRP). These articles can give you a better understanding of the OTA (online travel agency) industry.
Investors can gain exposure to the Chinese OTA market by investing in the KraneShares CSI China Internet ETF (KWEB).
In the next part of this series, we’ll see if Qunar can continue to grow its revenues in 2016.