Sina stock returns
Sina (SINA) is another Chinese company that has burnt massive investor wealth in the last 18 months. Between March 2015 and March 2018, Sina’s stock rose by an impressive 306.0%. However, the stock has since declined by 67.3%. While most tech stocks have staged a comeback this year, Sina stock is down 26.2% year-to-date.
Sina stock has lost 37.0% in market value since the start of May 2019 and is trading close to its 52-week low. In the first quarter, Sina reported sales of $475.1 million, a rise of 8.0% and adjusted earnings of $0.40, a fall of 15.0% year-over-year. Wall Street estimated the company would post revenue of $473.8 million with EPS of $0.42 in the first quarter. This earnings miss has also driven Sina stock lower recently. While Sina stock is oversold, investors are concerned over the company’s slowing revenue growth.
Sina’s sales growth has fallen drastically from 58.5% in the first quarter of 2018 to 8.0% in the first quarter of 2019. Read Why Sina’s Slowing Revenue Growth Is a Concern to see what has impacted the company’s sales in the recent quarter.
Sina stock is undervalued
The massive pullback and investment depreciation provide an interesting opportunity for Sina investors. The stock remains risky due to uncertainty about the trade war. However, Sina stock is currently trading at a forward PE multiple of 9.3x.
In comparison, its earnings per share are estimated to grow by 9.8% in fiscal 2019 and by 25.8% in fiscal 2020. Sina’s estimated five-year earnings growth is also impressive at 21.3%.
How do analysts view Sina?
Out of the 17 analysts covering Sina.com, 15 recommend a “buy” and two recommend a “hold.” There are no “sell” recommendations. The analysts have an average 12-month stock price target of $80.7 for Sina, indicating the stock has an upside potential of 104.0% from its current price.