Vipshop Holdings Ltd – ADR (VIPS) is one of the stocks that just continues to climb the wall of skepticism and rewards investors with consistent gains. While the skeptics cite valuation, a slowing Chinese economy and concerns about the Chinese consumer, Vipshop just continues to deliver strong results every quarter. Vipshop recently reported earnings and had yet another positive earning surprise.
Vipshop reported that in the third quarter revenues grew year over year by an impressive 130%. The number of active Vipshop subscribers was up 136%, and total orders were up by more than 117% compared to the third quarter of 2013. Net income leaped by 30.3% to $27.7 million from $12.0 million in 2013.
Vipshop had a fantastic quarter and growth is likely going to continue going into 2015. Vipshop said that it expects year-over-year revenue growth of between 84% and 87% in the fourth quarter of the year. Vipshop is in fantastic shape financially at the end of the quarter with cash of $668.2 million and held-to-maturity securities of $491.1 million.
Vipshop will use its cash to continue to expand its operations. In the earnings release, CEO Eric Shen told investors,
“As mobile migration on our platform continues unabated, we will continue investing R&D dollars in enhancing the mobile user experience, and further simplifying and reinforcing our quality value proposition with shoppers on the Vipshop platform. Going forward, we believe such investments, along with continued investments in merchandizing, marketing and big data, will further strengthen the foundation of our expanding platforms and enhance our users’ shopping experience on different devices.”
Analysts have been raising their estimates for Vipshop in both 2014 and 2015. Portfolio Grader has ranked VIPS stock as a “strong buy” for the past year, and investors have been rewarded with gains of over 180%. VIPS stock is still a “strong buy” at the current price as the fundamentals continue to improve quarter after quarter. I expect 2015 to be another great year for Vipshop and its shareholders.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
