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Why Tuniu Corporation Stock Is Surging for a Second Day

What happened

For the second day running, shares of Tuniu Corporation (NASDAQ: TOUR) are running higher.

After spiking 21.4% on Tuesday, shares of the Chinese online travel agent and purveyor of tour packages ran up another 34.5% through 11:15 a.m. EST Wednesday, adding nearly one full dollar to the share price -- and on precious little news.

Image source: Getty Images.

So what

In fact, about the only thing I can see that might explain investors' sudden enthusiasm for Tuniu stock is a brief announcement on the company's investor relations page yesterday, to the effect that Tuniu "plans to release its unaudited financial results for the third quarter ended September 30, 2020, before the market opens on December 1, 2020."

Yes, you read that right. No earnings. No hint of what earnings might be. Just an announcement that there will be earnings news a week from now. That simple statement is the reason that a share of Tuniu is now worth 63% more than what it cost two days ago.

Now what

That doesn't seem to make a whole lot of sense, until, perhaps, you consider that expectations for Tuniu's earnings are so very low right now, that they might prove an easy hurdle to leap. According to Yahoo! Finance figures, analysts expect Tuniu's sales this year to decline nearly 50% year over year (down 46.7%, to be precise).

Anything better than an utterly disastrous report next Tuesday, therefore, could qualify as an "earnings beat" for this stock. My guess: That's exactly what traders are hoping will happen.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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