Bernstein Starts 58. com Inc (WUBA) at Underperform

Bernstein initiates coverage on 58. com Inc (NYSE: WUBA) with a Underperform rating and a price target of $25.00.

Analyst Bhavtosh Vajpayee comments "WUBA runs an online classifieds business, which will be squeezed as shares shift within digital advertising. The advantage lies with the big platforms, whose user bases dwarf others. Classifieds formed 5-6% of digital ad spend in China in 2016, and could go down further. The business model feeds off localization and smaller merchants, and transitions poorly to scale economies. This makes us skeptics on both revenue growth and margin expectations in consensus numbers. Meanwhile, pricing drops of the recent past need to be stemmed, just as business has softened from realty (WUBA's largest industry exposure), post cooling measures announced by the government"

For an analyst ratings summary and ratings history on 58. com Inc click here. For more ratings news on 58. com Inc click here.

Shares of 58. com Inc closed at $30.48 yesterday.

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