The shares of Weibo Corporation (NASDAQ:WB) and Kosmos Energy Ltd. (NYSE:KOS) were among the active stocks of the last trading sessions. Weibo Corporation (NASDAQ:WB) declined to -3.58% closing at the price of $58.49 whereas the shares of Kosmos Energy Ltd. (NYSE:KOS) declined -4.31% with the decrease of -0.35 points closing at the price of $7.77. Weibo Corporation has currently decrease -50.89% in its stock over the period of 6-months while its rival Kosmos Energy Ltd. added 12.61% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Weibo Corporation (NASDAQ:WB) is 16.4% while the ROI of Kosmos Energy Ltd. (NYSE:KOS) is -5.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WB’s EBITDA Margin is 23.66 whereas KOS’s is -51.49.
Both the profitability ratios suggest that Weibo Corporation (NASDAQ:WB) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Weibo Corporation (NASDAQ:WB) reported $0.68/share EPS for the previous quarter where analysts were predicting an EPS to be $0.66/share Thus beating the analyst Estimates with a Surprise Factor of 3 Percent. While, Kosmos Energy Ltd. (NYSE:KOS) reported EPS of $-0.09/share in the last quarter. The analysts projected EPS of $-0.04/share depicting a Surprise of -125 Percent.
Taking a look at Earnings per Share, Weibo Corporation tends to be beating the analyst estimates more than Kosmos Energy Ltd.. so WB is more profitable than KOS.
Technical Analysis of Weibo Corporation & Kosmos Energy Ltd.
Moving average convergence divergence (MACD) shows that Weibo Corporation (NASDAQ:WB) is on a PRICE RELATIVITY trend While Kosmos Energy Ltd. (NYSE:KOS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Weibo Corporation was in BEARISH territory and Kosmos Energy Ltd. was in BEARISH territory.
WB’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While KOS’s candle is BEARISH with HIGH.
EPS Growth Rate: WB’s 46.02% versus KOS’s 23.8%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Weibo Corporation (NASDAQ:WB) is predicted at 46.02% while Kosmos Energy Ltd. (NYSE:KOS) stands at 23.8%. These numbers suggest that WB is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of WB stands at 4 while KOS is at 1 whereas the debt ratio of the prior is 0.62 while the debt ratio of the later is 1.57.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 1.8 for WB and 1.9 for KOS which means WB has Buy rating whereas KOS has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for WB is $121.37 which is 51.81% of its current price while KOS has price target of 10.23 which is 24.05% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
WB currently has price to earning P/E ratio of 28.23 whereas KOS has 0 while the forward P/E ratio for the prior stands at 15.67 and for the later it depicts the value of 15.7.
The price to Book P/B for WB is 9.12, Price to Sale is at 8.29 and for KOS these ratios stand at 4.13 and 4.57.