Sina (SINA) stock fell 8.2% on May 17. No relevant news drove the stock lower on the day. It seems that Baidu’s unimpressive results, the trade war between China and the United States, and general macroeconomic weakness have weighed on Sina stock. Chinese (FXI) tech companies JD.com (JD) and Alibaba (BABA) fell 3.8% and 3.4%, respectively, on May 17.
Sina stock has generated a return of -8.5% since the start of 2019 and is down 22% this month. The stock has fallen 46% in the last 12 months. It’s risen just 2.6% annually in the last three years and 2.7% annually in the last five years.
Is the stock undervalued after its recent pullback?
Sina stock is trading at a forward PE multiple of 11.6x. Comparatively, its EPS are expected to rise 9.8% in 2019 and 25.8% in 2020. Its earnings are expected to rise at a compound annual growth rate of 21.3% in the next five years.
Sina’s estimated five-year PEG (PE-to-growth) ratio is 0.75x. A PEG ratio of below 1 suggests that a stock is undervalued. Sina also looks undervalued at its current price and seems like a good pick considering its robust sales and earnings growth.
However, the ongoing trade war will affect the stock and could drag it lower. What does Wall Street think?
Sina stock is trading at a significant discount
Of the 17 analysts tracking Sina, 15 have given it “buys,” and two have given it “holds.” There are no “sell” recommendations on the stock. Wall Street has given it an average 12-month target price of $80.7, which indicates that Sina is trading at a discount of 64% to analysts’ average estimate.