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Bull of the Day: Baozun (BZUN)

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The spread of COVID-19 and the ensuing global shutdown caused a seismic shift in the economy. Old school, brick-and-mortar businesses which were already on their last legs, were put out of their misery. That same death knell was the dinner bell for other industries which are positioned to benefit from the shift in behavior. Anything that ties into cloud-based connections or e-commerce has seen an incredible tailwind. The increase in activity has been enough to lift all boats in the harbor, not just giants like Amazon.

Today’s Bull of the Day is one company benefiting from the increase in e-Commerce business. It’s Zacks Rank #1 (Strong Buy) Baozun (BZUN - Free Report) . Baozun Inc. provides brand e-commerce service to brand partners in the People's Republic of China. It offers end-to-end e-commerce solutions, including IT infrastructure setup and integration, sale of apparel, home and electronic products, online store design and setup, visual merchandising and marketing, online store operations, customer services, warehousing, and order fulfillment. 

The reason for the favorable Zacks Rank is the upwards movement in earnings estimates coming from analysts. Over the last thirty days, the Zacks Consensus Estimate for the current year is up from $1.06 to $1.13 while next year’s number is up from $1.64 to $1.75. Those numbers would represent year-over-year earnings growth of 31.4% and 55.31% respectively. Revenues are estimated to grow dramatically as well with current year growth calling for 22.18% growth and next year at 22.3%.

Baozun Inc. Price and Consensus

Baozun Inc. Price and Consensus

Baozun Inc. price-consensus-chart | Baozun Inc. Quote

Over the last few years, the company has gotten into the bad habit of over-promising and under-delivering when it comes to earnings. Taking a look at the Price, Consensus and EPS Chart above, the multicolored lines represent our Zacks Consensus Estimates over time while the black line represents price. That upper-left to lower-right action across several years illustrates estimates coming down over time. This behavior continued on up until earlier this year. There is a chance that this disturbing trend has finally come to an end. That would be great for long-term investors here with the stock well shy of all-time highs which sit up over $60.

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