Brean Capital Remains Bullish Following Vipshop Holdings (VIPS) Strong Q1 Results

Brean Capital maintains a Buy rating and $30.00 price target on Vipshop Holdings (NYSE: VIPS) following strong Q1 results. VIPS reported $1.39bn in net revenue, beating the consensus of $1.30bn. Adjusted EPS came in at $0.13, beating Street estimates by three cents. VIPS guided 2Q15 revenue in the range of RMB 8.7bn - RMB 8.9bn.

Brean Capital analyst, Fawne Jiang, commented on VIPS, saying, "VIPS delivered strong 1Q results with both top- and bottom-line beat. The company provided slightly soft 2Q guidance, largely driven by slower customer growth YoY as the company scales back its group-buy business. We view it a hiccup and a result of trial and error in its customer acquisition efforts. We estimate that customer growth of its core flash sales business remains healthy and robust. As we start to lap group-buy impact in 3Q, we expect accelerated growth. In addition, with the weeding out of lower quality customers and growth in better quality customers, we see an upward trend in repeat customers/purchase as well as the potential improvement for order size, which should also be the main drivers for continued long-term growth. Furthermore, with the scale-back of group-buy, we expect room for margin improvement (freeing up resources, e.g. logistics) in the coming quarters as well. As such, we reiterate our Buy rating on the stock and our TP of $30."

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 $25.21 yesterday.

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