Skip to main content

Market Overview

Summit's Guo Sees Buying Opportunity On Vipshop Sell-Off

Share:

In a report published Wednesday, WR Hambrecht analyst Henry Guo maintained a Buy rating on Vipshop Holdings Ltd - ADR (NYSE: VIPS), while reducing the price target from $35 to $31.

Vipshop Holdings reported robust 2Q15 results, with both top and bottom line beating the Street expectations. The company's gross and operating margins also continued to improve, despite investments in technology and branding.

Guo expects that the margin pressures arising from investments to be offset by increased leverage. The company's mobile segment gained traction and contributed 76 percent of the GMV in 2Q15, up from 72 percent in 1Q15 and 66 percent in 4Q14.

"We believe the mobile strength should further help top line growth, given mobile transaction's high frequency," Guo added.

Concerns related to the macro environment and deceleration in top line growth led to a negative market reaction to Vipshop Holdings' results, the WR Hambrecht report noted.

According to Guo, "Compared to other B2C players in the space, we believe Vipshop's discount merchandise model is less cyclical, as it provides a platform for retailers, brands, and manufacturers to clear their off - season and unsold inventory."

Vipshop Holdings' long-term growth prospects are expected to be driven by strong business fundamentals, category expansion, cross border model and increasing coverage of in-season merchandise.

"With dominant position in the market, healthy top-line growth trajectory, and high visibility to profitability improvement, we consider VIPS a key holding to get exposure to China's B2C eCommerce growth in the longer term," the WR Hambrecht report added.

Latest Ratings for VIPS

DateFirmActionFromTo
Feb 2022Morgan StanleyDowngradesOverweightEqual-Weight
Nov 2021BenchmarkDowngradesBuyHold
Sep 2021New Street ResearchDowngradesBuyNeutral

View More Analyst Ratings for VIPS

View the Latest Analyst Ratings

 

Related Articles (VIPS)

View Comments and Join the Discussion!

Posted-In: WR HambrechtAnalyst Color Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
SEDGB of A SecuritiesMaintains411.0
PTLOPiper SandlerMaintains28.0
AOUTLake StreetMaintains26.0
RAPTPiper SandlerMaintains52.0
OCXLake StreetMaintains6.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com