Stock To Watch: Vipshop Holdings (VIPS) In Perilous Reversal

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 $70.8 million.
  • VIPS has traded 144,498 shares today.
  • VIPS is down 3% today.
  • VIPS was up 5.9% yesterday.

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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 336.7. Currently there are 5 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 1.0 million shares per day over the past 30 days. Vipshop has a market cap of $3.9 billion and is part of the services sector and retail industry. Shares are up 296.4% 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 solid stock price performance. 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 7.1%. 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.
  • 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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