WB: Improving User Engagements and Monetization; Initiate with a Buy Rating
We are initiating on Weibo Corporation with a Buy rating. We believe the company is undervalued compared to its revenue and earning potentials, which was a major concern among investors. The concern we believe is mainly due to two issues: 1) slowdown in user growth and engagement level; and 2) limited methods of monetization. At this point, we believe these two issues are being addressed, and as such the revenue potential can be realized in the near future. Therefore, we initiate our coverage of Weibo with a BUY rating and price target of $24.00.