Summit Research Cuts Price Target on Vipshop Holdings (VIPS) Following 2Q15 Results

Summit Research maintained a Buy rating on Vipshop Holdings (NYSE: VIPS), and cut the price target to $31.00 (from $35.00), following its 2Q15 report. Revenue in the quarter was up 76% Y/Y, versus consensus of 74% Y/Y. VIPS' guidance implies a Y/Y growth range of 71%- 74%, versus street expectation of 75%.

Analyst Henry Guo commented, "VIPS reported strong 2Q15 results with both top and bottom above street expectations. Also, gross margin and operating margin continue to improve, despite investments. However, the market negatively reacted to the company’s earnings report yesterday, mainly on concerns of macro-environment and top-line growth deceleration. 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. On top-line growth momentum, excluding discontinued group-buy business and acquired Lefeng cosmetics business, the company’s core segments revenue grew 97% Y/Y in the June quarter, suggesting its strong business fundamentals. Longer term, we believe Vipshop story intact, as we see multiple long-term growth drivers including 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. We maintain our BUY rating on VIPS but lower PT from $35 to $31, which represents 30x our 2016 non-GAAP EPS earnings."

For an analyst ratings summary and ratings history on Vipshop Holdings click here. For more ratings news on Vipshop Holdings click here.

Shares of Vipshop Holdings closed at $18.26 yesterday.

You May Also Be Interested In

• MarineMax (HZO) PT Lowered to $35 at Stifel
• Meta Platforms Inc. (META) PT Lowered to $575 at UBS, 'shares are offering a 3-to-1 skew'
• Edwards Lifesciences (EW) Tops Q1 EPS by 2c; offers guidance