Why Weibo Corp. Stock Jumped Today

By Markets Fool.com

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Image source: Weibo.

What:Shares of Weibo Corp.(NASDAQ: WB) were moving higher today after the Chinese microblogging site posted better-than-expected results in its second-quarter earnings report. As of 3:04 p.m. EDT, the stock was up 11.9%.

So what:The strong results also lifted majority shareholderSina Corp.(NASDAQ: SINA) as Weibo's adjusted per-share profit jumped from $0.05 a year ago to $0.16, beating analyst estimates of $0.11. Revenue soared 36% to $146.9 million, ahead of the company's own guidance of $138 million to $143 million, and theTwitter-likeplatform saw monthly average users improve to 282 million from 261 million in the previous quarter.

CEO Gaofei Wang said the company is "benefiting from strong adoption of social marketing," and also credited growth in video for the impressive quarter. The company's operating leverage also helped deliver outsize profit growth.

Now what:Looking ahead, Weibo's guidance for the current quarter was also on the upside as it sees revenue of $168 million to $173 million, better than the analyst consensus of $165.3 million.

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While Chinese stocks can often be mysteries and tend to be riskier than American equities, Weibo has been a strong performer since it was spun off from Sina two years ago; the stock has more than doubled this year. After a flawless earnings report featuring user growth, better-than-expected results, and upside guidance, the stock could easily keep this momentum going.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool recommends Sina.

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