Have you been paying attention to shares of
Vipshop Holdings Limited (? Shares have been on the move with the stock up 11.2% over the past month. The stock hit a new 52-week high of $16.5 in the previous session. Vipshop Holdings Limited has gained 20.5% since the start of the year compared to the 33.6% move for the Zacks Computer and Technology sector and the 5.4% return for the Zacks Internet - Delivery Services industry. VIPS Quick Quote VIPS - Free Report) What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 23, 2023, Vipshop Holdings Limited reported EPS of $0.51 versus consensus estimate of $0.39.
For the current fiscal year, Vipshop Holdings Limited is expected to post earnings of $1.94 per share on $16.06 billion in revenues. This represents a 25.16% change in EPS on a 5.07% change in revenues. For the next fiscal year, the company is expected to earn $2.06 per share on $16.91 billion in revenues. This represents a year-over-year change of 5.93% and 5.27%, respectively.
Vipshop Holdings Limited may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Vipshop Holdings Limited has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 8.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 31X. On a trailing cash flow basis, the stock currently trades at 10.6X versus its peer group's average of 16.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Vipshop Holdings Limited currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Vipshop Holdings Limited fits the bill. Thus, it seems as though Vipshop Holdings Limited shares could have a bit more room to run in the near term.
How Does VIPS Stack Up to the Competition?
Shares of VIPS have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is
MakeMyTrip Limited (. MMYT has a Zacks Rank of # 2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of C. MMYT Quick Quote MMYT - Free Report)
Earnings were strong last quarter. MakeMyTrip Limited beat our consensus estimate by 110%, and for the current fiscal year, MMYT is expected to post earnings of $0.68 per share on revenue of $699.32 million.
Shares of MakeMyTrip Limited have gained 12.5% over the past month, and currently trade at a forward P/E of 42.12X and a P/CF of 66.91X.
The Internet - Delivery Services industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for VIPS and MMYT, even beyond their own solid fundamental situation.