Tencent posted its first quarter results, where revenue across all business segments slipped -0.12% from the year-ago quarter to 135.47 billion yuan —below FactSet consensus estimates for 140.82 billion yuan. The Chinese company’s profit attributable to shareholders decreased by -23% from a year ago.
Revenue from the business segment that includes gaming (which is Tencent's largest source of revenue) experienced mild growth from the prior quarter and the year-ago period to 72.74 billion yuan in first quarter revenue. The segment was impacted by challenges from Beijing's restrictions on licensing new games and a slower growth in the international market.
Revenue from Fintech and business services segment (Tencent’s second-largest revenue driver) plunged by -10.8% quarter-on-quarter-- the first sequential drop since Q1 2020 when there was COVID-19 related lockdowns across a large part of mainland China. The segment grew by 10% from a year ago, but missed FactSet estimates by 3.41 billion yuan. It also showed a substantial slowdown from a 25% increase in Q4 2021.
Tencent’s mobile payment apps WeChat registered monthly active users growth (domestically and internationally) of +3.8% from a year ago to 1.29 billion users.
Be on the lookout for a price bounce soon.
The 10-day moving average for TCEHY crossed bullishly above the 50-day moving average on March 20, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TCEHY advanced for three days, in of 266 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 196 cases where TCEHY Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The 10-day RSI Indicator for TCEHY moved out of overbought territory on April 12, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 21 similar instances where the indicator moved out of overbought territory. In of the 21 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on April 12, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on TCEHY as a result. In of 111 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for TCEHY turned negative on April 15, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TCEHY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
TCEHY broke above its upper Bollinger Band on March 27, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.939) is normal, around the industry mean (19.638). P/E Ratio (16.393) is within average values for comparable stocks, (49.308). Projected Growth (PEG Ratio) (1.058) is also within normal values, averaging (3.441). Dividend Yield (0.007) settles around the average of (0.026) among similar stocks. P/S Ratio (5.461) is also within normal values, averaging (110.312).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. TCEHY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. TCEHY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 92, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Industry InternetSoftwareServices