Trade-Ideas: Vipshop Holdings (VIPS) Is Today's Pre-Market Mover With Heavy Volume Stock

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 pre-market mover with heavy volume 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 $209.0 million.
  • VIPS traded 110,237 shares today in the pre-market hours as of 9:19 AM, representing 11.3% of its average daily volume.

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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 159.2. Currently there are 8 analysts that rate Vipshop Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Vipshop Holdings has been 923,500 shares per day over the past 30 days. Vipshop has a market cap of $12.2 billion and is part of the services sector and retail industry. Shares are up 162.4% year-to-date as of the close of trading on Tuesday.

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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, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • VIPS's very impressive revenue growth greatly exceeded the industry average of 0.4%. Since the same quarter one year prior, revenues leaped by 125.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 318.18% and other important driving factors, this stock has surged by 351.87% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although VIPS had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The gross profit margin for VIPSHOP HOLDINGS LTD -ADR is rather low; currently it is at 24.90%. 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, VIPS's net profit margin of 3.78% compares favorably to the industry average.
  • The debt-to-equity ratio is very high at 2.89 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 1.27, demonstrating the ability to handle short-term liquidity needs.

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