HUYA to Post Q2 Earnings: Expanding User Base to Aid Growth

Huya Inc. HUYA is scheduled to report its second-quarter 2024 results on Aug 13.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $218.6 million, suggesting a decline of 12.96% year over year.

The consensus mark for second-quarter earnings has remained unchanged at 7 cents over the past 30 days, suggesting year-over-year growth of 16.67%.

HUYA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the earnings surprise being a whopping 113.2%, on average.

Factors to Note

Huya's second-quarter 2024 performance is expected to have been driven by an increase in its user base. Robust usage of in-game-related services on its digital platform has been one of the major top-line growth drivers.

In the first quarter of 2024, game-related services, advertising, and other revenues surged 137.6% year over year and 30.7% sequentially to RMB 244 million and accounted for 16% of total revenues.

HUYA benefits from a growing number of higher-value gaming users, particularly in the MIMO and SLG categories. Its strategy of offering a diverse range of popular game props for an increasing number of games is expected to have driven in-game spending.

Huya has been expanding its offering of broadcaster-customized in-game virtual items that strengthen the connection between broadcasters and viewers.

In the first quarter of 2024, Huya broadcasted more than 65 licensed professional esports tournaments.

HUYA's growing efforts to enhance its platform with ecology updates, focus toward commercialization, technology and product evolution are expected to have been tailwinds in the to-be-reported quarter.

HUYA benefits from the growing demand for AI-related services and real-time game data on the back of its enhanced collaboration with Tencent.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Huya has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases: 

The Madison Square Garden MSGS has an Earnings ESP of +203.00% and a Zacks Rank #3.

The Madison Square Garden's shares have increased 7.9% year to date. MSGS is scheduled to release fourth-quarter 2024 results on Aug 13.  

Ess Tech GWH has an Earnings ESP of +11.54% and a Zacks Rank #3.  

Ess Tech's shares have declined 43% year to date. GWH is set to report its second-quarter 2024 results on Aug 14. 

Snowflake SNOW has an Earnings ESP of +9.68% and a Zacks Rank #3 at present.

Snowflake shares have plunged 37.5% year to date. SNOW is set to release second-quarter fiscal 2025 results on Aug 21.

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