Vipshop Holdings (VIPS) Stock Hits One-Year High Ahead of Singles' Day
BYAndrew MeolaFollow | 11/10/14 - 02:13 PM EST|
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NEW YORK (TheStreet) -- Shares of Chinese online discount retailer Vipshop Holdings (VIPS - Get Report) rose more than 4% to a 52-week high of $24.63 in afternoon trading Monday ahead of Singles' Day on Tuesday, the largest shopping event in China.
Chinese stocks received a boost Monday ahead of Singles' Day, and Chinese e-commerce giants Alibaba (BABA) and JD.com (JD) rose 1% and 7%, respectively.
JD.com reported revenue of $1.6 billion last year during its Singles' Day promotion period that started November 1, 2013. Alibaba processed 36.2 billion yuan, or $5.8 billion, in gross merchandise volume last year. The company processed 254 million orders within 24 hours and handed 156 million packages.
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Vipshop was up 3.96% to $24.26 at 2:07 p.m.
Separately, TheStreet Ratings team rates VIPSHOP HOLDINGS LTD -ADR as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate VIPSHOP HOLDINGS LTD -ADR (VIPS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including premium valuation, generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
VIPS's very impressive revenue growth greatly exceeded the industry average of 12.6%. Since the same quarter one year prior, revenues leaped by 136.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
VIPSHOP HOLDINGS LTD -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VIPSHOP HOLDINGS LTD -ADR turned its bottom line around by earning $0.09 versus -$0.02 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus $0.09).
The debt-to-equity ratio is very high at 2.00 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, VIPS's quick ratio is somewhat strong at 1.24, demonstrating the ability to handle short-term liquidity needs.
You can view the full analysis from the report here: VIPS Ratings Report


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