Q3 Earnings Preview for HUYA (NYSE:HUYA)

in EARNINGS/INVESTING IDEAS by

HUYA Inc. (NYSE:HUYA) is scheduled to report Q3 earnings results before markets open for trading on November 11, 2020.

The company is expected to report earnings of 元1.40/share on revenue of 元2.845 billion. The consensus earnings per share (EPS) of 元1.40/share is based on a poll of 5 analysts and represents a growth in eps of 61.0% over the same quarter last year, when the company reported earnings of 元0.87/share.

The revenue forecast of 元2.845 billion based on a poll of 8 analysts implies a year-over-year (YoY) growth in revenue of 25.6%. Last year the company reported 元2.265 billion in revenue for the quarter.

Expected to report EPS growth of 61.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue 元2,845.04 元2,265.09 25.6%
EPS 元1.40 元0.87 61.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from HUYA Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 元1.20 元1.49 24.4% Beat
Q1, 2020 元1.04 元1.12 7.9% Beat
Q4, 2019 元0.95 元1.02 7.2% Beat
Q3, 2019 元0.74 元0.87 17.0% Beat
Q2, 2019 元0.56 元0.73 31.4% Beat
Q1, 2019 元0.61 元0.59 −3.3% Missed
Q4, 2018 元0.54 元0.76 41.6% Beat
Q3, 2018 元0.30 元0.55 85.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 7.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 11, 2020 $24.04 $25.73 7.0% Increase
May 20, 2020 $18.75 $17.09 −8.9% Decline
March 16, 2020 $15.40 $14.85 −3.6% Decline
November 12, 2019 $25.35 $24.18 −4.6% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.07, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.07 implies a 1.9% chance of earnings manipulation.

Fundamentals And Technical Analysis

HUYA Inc. is currently trading at $21/share, down −4.5% for the day. The company is trading at approximately 69.0% of its 52-week high of $30.62/share. The company’s stock price is down −18.4% since the last earnings report and down −4.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 44.10 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:HUYA Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 45.29 and a forward P/E multiple of 26.39.

HUYA Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.27. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $21
P/E Ratio 45.3x
P/E Ratio (Fwd) 26.4x
PEG Ratio 0.6
Total Debt / Total Capital 0.3%
Levered Free Cash Flow 3.1x
EV / EBITDA 35.5x

Finbox

HUYA Inc. is a mid-cap stock with a market capitalization of $4.893 billion and a total enterprise value of $3.385 billion. The company operates in the Communication Services sector and the Entertainment industry.

HUYA Inc., through its subsidiaries, operates game live streaming platforms in the People’s Republic of China. Its platforms enable broadcasters and viewers to interact during live streaming. Its live streaming content covers a library of games, including mobile, PC, and console games; and other entertainment genres, such as talent shows, anime, outdoor activities, live chats, online theatre, and other genres. The company operates Nimo TV, a game live streaming platform primarily in Southeast Asia and Latin America. It also provides online advertising and marketing services. In addition, the company provides software development and Internet value added services. As of December 31, 2019, its live streaming content covered approximately 3,800 games. The company was founded in 2014 and is headquartered in Guangzhou, the People’s Republic of China. HUYA Inc. is a subsidiary of Tencent Holdings Limited.

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