Bauzon Inc (ADR) (NASDAQ:BZUN) isn’t the most well-known stock out there — particularly in a world dominated by names like Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN). Even out of the Chinese stocks, companies like Baidu Inc (ADR) (NASDAQ:BIDU) and Alibaba Holding Group Ltd (NYSE:BABA) are far more well-known.
But that doesn’t mean Baozun stock can’t go on to make new all-time highs.
BZUN stock is up a ridiculous 150+% over the past 12 months. While the broader stock market has been struggling for traction in 2018, BZUN hasn’t, already up more than 50%. However, the company — which engages in e-commerce services and solutions — could have even more upside. Here’s three reasons why.
BZUN Stock Earnings
Ever since Alibaba reported earnings last Friday, Chinese e-commerce stocks have been rebounding with a vengeance. JD.Com Inc(ADR) (NASDAQ:JD), BABA and BZUN were among them. JD reported disappointing earnings on Tuesday before the open, but this doesn’t seem to have affected others in the space.
It helps that the stigma around Chinese e-commerce stocks is starting to lift. Perhaps that’s on the growing hope that a full-blown trade war between the U.S. and China won’t develop. Not that it would likely have a huge impact on BABA, JD, BZUN, BIDU and many others. But when Washington is arguing over trade with China, any Chinese stocks are likely to get hit.
Further, BZUN will report earnings on May 14th. Poorly received results are an obvious catalyst for a lower stock price. However, if investors like the results they could surely elevate the stock to new highs.
What might be in the report for investors to like?
This isn’t a great quarter in terms of growth for BZUN, to be honest. Analysts are looking for revenue to grow just 10% to $140 million. Earnings estimates of 8 cents per share would mirror the same results of BZUN’s 2017 first quarter.
However, the numbers look much better for the full year.
Analysts expect sales to grow 25.5%, before accelerating to 28.5% in 2019. On the earnings front, there’s potential for accelerating growth from 2018 to 2019, but it’s not forecasted to happen quite yet. Analysts are looking for 62.5% earnings growth this year, followed by growth of 59% in 2019.
The prospect of accelerating revenue growth rather than strong-but-decelerating growth is much more attractive to investors than some people give credit for. It would be great if the company can make it happen for both metrics, though.
Baozun Stock Chart
Earnings and a strong growth profile can surely help boost the stock. But as we know, technicals and fundamentals don’t have to line up. Companies with poor fundamentals can rally like mad and great companies can fall like bricks thrown off a boat.
In the case of BZUN stock, we’re looking at a decent breakout on Monday as our third catalyst to new highs. As you can see, BZUN pushed through short-term resistance Monday, when its 5% rally powered it above downtrend resistance (blue line). That now gives it a shot to retest the $52 level.
Should BZUN push through that mark, it will go on to make new all-time highs. It helps that the MACD — which measures momentum and is highlighted on the chart with a blue circle — is turning bullish as we speak.
I also like that BZUN has been very strong over the past year, but not so strong that its moving averages are light years away. Just a few days ago, BZUN stock bounced off the 50-day moving average. It helped that shares consolidated between August-March, allowing the stock to digest its large move higher over the previous months.
It helps too that BZUN stock trades very technically. Watch for a retest of $52. Should it break through, look for more highs to be on the way.