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SINA Corporation (NASDAQ:SINA): What Can We Expect From This High Growth Stock?

Simply Wall St

The latest earnings release SINA Corporation's ( NASDAQ:SINA ) announced in December 2018 suggested that the business faced a significant headwind with earnings declining by -20%. Investors may find it useful to understand how market analysts perceive SINA's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

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View our latest analysis for SINA

Analysts' expectations for next year seems buoyant, with earnings increasing by a robust 43%. This growth seems to continue into the following year with rates reaching double digit 79% compared to today’s earnings, and finally hitting US$338m by 2022.

NasdaqGS:SINA Past and Future Earnings, May 17th 2019

Even though it is helpful to understand the growth rate year by year relative to today’s figure, it may be more insightful gauging the rate at which the earnings are moving every year, on average. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of SINA's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 28%. This means, we can presume SINA will grow its earnings by 28% every year for the next couple of years.

Next Steps:

For SINA, I've put together three fundamental aspects you should look at:

  1. Financial Health : Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation : What is SINA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SINA is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SINA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.