Luckin Coffee (LK) Expected To Grow Revs 85% - Needham

Needham & Company analyst Vincent Yu reiterated a Buy rating and $27.00 price target on Luckin Coffee (NASDAQ: LK) ahead of 2Q19 financial results on August 14th. The company is expected to grow revenues by ~85% to RMB 905 million while generating a net loss of RMB 692.5 million. The growth is expected to mostly come from new store openings as well as SKU expansion.

The analyst stated "We are looking for a total store count of roughly 2900 at the end of 2Q19, a net add of 530 stores during the quarter. (On July 16th, LK announced the opening of its 3000th store in China). Management will likely to reiterate its plan to reach 4500 stores by year-end". He went on to state "We expect per unit ASP of roughly RMB 10.9 for 2Q19, compared to RMB 10.1 for 1Q19. We look for ASP to trend up through the balance of the year as the company introduces more items with higher ASPs and curtails its promotional spending".

For an analyst ratings summary and ratings history on Luckin Coffee click here. For more ratings news on Luckin Coffee click here.

Shares of Luckin Coffee closed at $20.18 yesterday.

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