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Tencent Holding Ltd. (TCEHY) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3-min read

Tencent Holding Ltd. (TCEHY) closed the most recent trading day at $35.79, moving +1.45% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.97%. At the same time, the Dow added 1.88%, and the tech-heavy Nasdaq gained 0.25%.

Prior to today's trading, shares of the company had lost 11.8% over the past month. This has lagged the Computer and Technology sector's loss of 11.71% and the S&P 500's loss of 9.93% in that time.

Wall Street will be looking for positivity from Tencent Holding Ltd. as it approaches its next earnings report date. On that day, Tencent Holding Ltd. is projected to report earnings of $0.48 per share, which would represent a year-over-year decline of 5.88%. Meanwhile, our latest consensus estimate is calling for revenue of $21.35 billion, down 2.98% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.77 per share and revenue of $84.99 billion. These totals would mark changes of -10.15% and -2.11%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for Tencent Holding Ltd.These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Tencent Holding Ltd. is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, Tencent Holding Ltd. is holding a Forward P/E ratio of 19.93. This represents a discount compared to its industry's average Forward P/E of 19.97.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 93, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TCEHY in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research