Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why, Inc. Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese online classified ad company, Inc.  (NYSE: WUBA  ) plunged 10% today after its quarterly results and outlook disappointed Wall Street.

So what: The stock has soared since its Halloween IPO on high expectations, but today's Q3 results -- EPS of $11 missed Wall Street estimates by $0.02 -- coupled with in-line guidance, are prompting analysts to scale back their growth estimates. While revenue soared 78% during the quarter thanks largely to a 73% jump in paying merchant members, the stock was priced for even more after yesterday's big pop.

Now what: Management now sees Q4 revenue of $41 million to $43 million -- representing a year-over-year jump of 66% to 74% -- which is pretty much in line with expectations. "We will continue to invest aggressively and work diligently to improve our competitive advantage in China's massive local services market," Chairman and CEO Michael Yao said in a statement. With still up about 100% from its IPO price of $17, and trading at a price-to-sales of 20, I'd wait for an even wider margin of safety before betting on it.

A more compelling opportunity for 2014
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2745622, ~/Articles/ArticleHandler.aspx, 10/1/2016 11:58:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 14 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:02 PM
WUBA $47.66 Up +0.14 +0.29% CAPS Rating: *