NEW YORK (TheStreet) -- Vipshop Holdings (VIPS) has been upgraded to "buy" from "neutral" with a $185 price target, Goldman Sachs said Monday. Analysts said the revision was due to the China-based retailer's growth potential and the stock being undervalued.
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Separately, TheStreet Ratings team rates VIPSHOP HOLDINGS LTD -ADR as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VIPSHOP HOLDINGS LTD -ADR (VIPS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low 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 8.8%. Since the same quarter one year prior, revenues leaped by 117.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 258.33% and other important driving factors, this stock has surged by 331.55% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VIPS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 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. During the past fiscal year, VIPSHOP HOLDINGS LTD -ADR turned its bottom line around by earning $0.91 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings ($2.44 versus $0.91).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 300.0% when compared to the same quarter one year prior, rising from $6.35 million to $25.40 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, VIPSHOP HOLDINGS LTD -ADR's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: VIPS Ratings Report