Shares of Weibo (NASDAQ:WB) gained nearly 9% on Tuesday following China’s announcement that it will ease COVID-19 restrictions for inbound travelers, beginning January 8, 2023. Weibo is a Chinese social media platform that allows people to create and distribute content in China.
The success of FMCG’s enterprises and e-commerce platforms had been impacted by China’s three-year-long, rigorous COVID-19 control procedures. The reopening of the borders should support global supply chains and improve trade operations, raising prospects for an economic revival.
On the financial front, Weibo reported a disappointing third quarter, with both revenues and earnings falling short of Wall Street expectations. In particular, the company reported a 27% year-over-year drop in advertising and marketing revenues in the Q3 quarter.
Should You Buy WB Stock?
At present, Wall Street is cautiously optimistic about the stock. Weibo has a Moderate Buy consensus rating based on four Buys and two Holds. The average WB stock price target of $20.60 implies 5.6% upside potential from the current level. Shares have tanked by about 34% over the past year.
Interestingly, the stock seems to be undervalued. Its current price/sales ratio of 2.27x reflects a discount of 68.6% from its five-year average of 7.22x. This offers investors a chance to invest in WB stock. Moreover, hedge funds are bullish on the stock.
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