Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified Vipshop Holdings ( VIPS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Vipshop Holdings as such a stock due to the following factors:
- VIPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $86.5 million.
- VIPS has traded 1.1 million shares today.
- VIPS is down 3.8% today.
- VIPS was up 7.5% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in VIPS with the Ticky from Trade-Ideas. See the FREE profile for VIPS NOW at Trade-Ideas More details on VIPS: Vipshop Holdings Limited, through its subsidiaries, operates as an online discount retailer for various brands in the People's Republic of China. VIPS has a PE ratio of 271.9. Currently there are 4 analysts that rate Vipshop Holdings a buy, no analysts rate it a sell, and none rate it a hold. The average volume for Vipshop Holdings has been 800,300 shares per day over the past 30 days. Vipshop has a market cap of $3.2 billion and is part of the services sector and retail industry. Shares are up 220.1% year to date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Vipshop Holdings as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- VIPS's very impressive revenue growth greatly exceeded the industry average of 17.8%. Since the same quarter one year prior, revenues leaped by 159.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- VIPS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
- When compared to other companies in the Internet & Catalog Retail industry and the overall market, VIPSHOP HOLDINGS LTD -ADR's return on equity is below that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 245.45% and other important driving factors, this stock has surged by 829.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The gross profit margin for VIPSHOP HOLDINGS LTD -ADR is rather low; currently it is at 23.52%. Regardless of VIPS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.57% trails the industry average.
- You can view the full Vipshop Holdings Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.