Tag Archives: VIPS

Why Switch, Vipshop Holdings, and Agilent Technologies Slumped Today

Tuesday was a down day for stocks, with the Dow Jones Industrial Average falling early to triple-digit losses and other major benchmarks declining by a similar percentage. The yield on the 10-year Treasury jumped well above the 3% mark, leading to speculation that a sustained upward move for interest rates could start to sap away some of the strength of the nearly decadelong bull market in stocks. Adding to the downward pressure was badly received news from several prominent individual companies. Switch (NYSE:SWCH), Vipshop Holdings (NYSE:VIPS), and Agilent Technologies (NYSE:A) were among the worst performers on the day. Here’s why they did so poorly.

Switch takes a tumble

Shares of Switch dropped 15% after the company reported first-quarter financial results. Revenue rose just 10% compared to the year-earlier quarter, and a more-than-80% drop in net income spooked some of those looking at the data-center infrastructure company’s prospects for growth. CEO Rob Roy had good things to say about Switch’s performance, noting that its efforts to expand its market over the long run appear to remain on course. Yet given how much competition there is among tech players trying to serve the rapidly evolving needs of enterprise clients, Switch will need to up its game in order to avoid falling behind and missing out on the big opportunity it has to serve strong demand for its data center services.

Building with Switch logo on it, and data-center modules attached to open bays in the building.

Image source: Switch.

Vipshop gets discounted

Vipshop Holdings stock plunged 20% in the wake of the company’s first-quarter financial report. The discount-apparel online retailer reported solid revenue gains of nearly 25%, but that marked continued deceleration in Vipshop’s growth rate from past quarters. Adjusted net income fell from year-ago levels, suggesting that the e-commerce retail space in China is getting crowded enough to put pressure on margin levels even for large players in the industry. With a major partnership with other big players in the Chinese internet space having failed thus far to produce the reaccelerated growth that investors have wanted to see, Vipshop will have to look for other strategies to bolster revenue gains in order to give shareholders greater confidence going forward.

Agilent deals with disappointment

Finally, shares of Agilent Technologies fell almost 10%. The diagnostics and scientific solutions specialist seemed to post solid results in its fiscal second-quarter financial report, including a 9% rise in revenue and a 25% jump in net income compared to the previous year’s period. CEO Mike McMullen praised Agilent’s success in fulfilling its growth strategy, including good performance from the company’s pharmaceutical customers, as well as the chemical and energy sector. Yet investors had wanted to see even better revenue gains given the upticks in the end markets of Agilent’s key customer base. Unless more robust growth comes later in the fiscal year, Agilent could have trouble getting back to the levels it enjoyed earlier in 2018.

Why Switch, Vipshop Holdings, and Agilent Technologies Slumped Today

Tuesday was a down day for stocks, with the Dow Jones Industrial Average falling early to triple-digit losses and other major benchmarks declining by a similar percentage. The yield on the 10-year Treasury jumped well above the 3% mark, leading to speculation that a sustained upward move for interest rates could start to sap away some of the strength of the nearly decadelong bull market in stocks. Adding to the downward pressure was badly received news from several prominent individual companies. Switch (NYSE:SWCH), Vipshop Holdings (NYSE:VIPS), and Agilent Technologies (NYSE:A) were among the worst performers on the day. Here’s why they did so poorly.

Switch takes a tumble

Shares of Switch dropped 15% after the company reported first-quarter financial results. Revenue rose just 10% compared to the year-earlier quarter, and a more-than-80% drop in net income spooked some of those looking at the data-center infrastructure company’s prospects for growth. CEO Rob Roy had good things to say about Switch’s performance, noting that its efforts to expand its market over the long run appear to remain on course. Yet given how much competition there is among tech players trying to serve the rapidly evolving needs of enterprise clients, Switch will need to up its game in order to avoid falling behind and missing out on the big opportunity it has to serve strong demand for its data center services.

Building with Switch logo on it, and data-center modules attached to open bays in the building.

Image source: Switch.

Vipshop gets discounted

Vipshop Holdings stock plunged 20% in the wake of the company’s first-quarter financial report. The discount-apparel online retailer reported solid revenue gains of nearly 25%, but that marked continued deceleration in Vipshop’s growth rate from past quarters. Adjusted net income fell from year-ago levels, suggesting that the e-commerce retail space in China is getting crowded enough to put pressure on margin levels even for large players in the industry. With a major partnership with other big players in the Chinese internet space having failed thus far to produce the reaccelerated growth that investors have wanted to see, Vipshop will have to look for other strategies to bolster revenue gains in order to give shareholders greater confidence going forward.

Agilent deals with disappointment

Finally, shares of Agilent Technologies fell almost 10%. The diagnostics and scientific solutions specialist seemed to post solid results in its fiscal second-quarter financial report, including a 9% rise in revenue and a 25% jump in net income compared to the previous year’s period. CEO Mike McMullen praised Agilent’s success in fulfilling its growth strategy, including good performance from the company’s pharmaceutical customers, as well as the chemical and energy sector. Yet investors had wanted to see even better revenue gains given the upticks in the end markets of Agilent’s key customer base. Unless more robust growth comes later in the fiscal year, Agilent could have trouble getting back to the levels it enjoyed earlier in 2018.

10 Stocks To Watch For May 15, 2018

Some of the stocks that may grab investor focus today are:

Wall Street expects Home Depot Inc (NYSE: HD) to report quarterly earnings at $2.06 per share on revenue of $25.22 billion before the opening bell. Home Depot shares fell 0.04 percent to $191.00 in after-hours trading.
Switch Inc (NYSE: SWCH) reported weaker-than-expected earnings for its first quarter on Monday. Switch shares dropped 7.18 percent to $14.36 in the after-hours trading session.
Analysts are expecting Boot Barn Holdings, Inc. (NYSE: BOOT) to have earned $0.16 per share on revenue of $163.65 million in the latest quarter. Boot Barn will release earnings after the markets close. Boot Barn shares gained 1.4 percent to $21.80 in after-hours trading.
Famous Dave’s of America, Inc. (NASDAQ: DAVE) reported upbeat earnings for its first quarter on Monday. Famous Dave’s of America shares gained 7.69 percent to $8.40 in the after-hours trading session.
Before the markets open, Eagle Materials Inc (NYSE: EXP) is estimated to report quarterly earnings at $1.08 per share on revenue of $306.04 million. Eagle Materials shares fell 0.09 percent to $105.72 in after-hours trading.

Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

Pfenex Inc (NYSE: PFNX) shares surged over 25 percent in after-hours trading after the company announced the positive top-line PF708 study results in Osteoporosis patients that showed no imbalances in severity or incidence of adverse events. Pfenex shares climbed 25.41 percent to $7.65 in the after-hours trading session.
Analysts expect AZZ Inc. (NYSE: AZZ) to report quarterly earnings at $0.44 per share on revenue of $231.53 million before the opening bell. AZZ shares dropped 0.66 percent to close at $45.05 on Monday.
Vipshop Holdings Ltd – ADR (NYSE: VIPS) reported weaker-than-expected earnings for its first quarter on Monday. Vipshop shares dipped 14.45 percent to $12.91 in the after-hours trading session.
After the closing bell, PetIQ, Inc. (NASDAQ: PETQ) is projected to post quarterly earnings at $0.12 per share on revenue of $108.58 million. PetIQ shares rose 1.29 percent to close at $19.63 on Monday.
Restoration Robotics Inc (NASDAQ: HAIR) reported downbeat results for its first quarter on Monday. Restoration Robotics shares dropped 19.77 percent to $3.45 in the after-hours trading session.

10 Stocks To Watch For May 15, 2018

Some of the stocks that may grab investor focus today are:

Wall Street expects Home Depot Inc (NYSE: HD) to report quarterly earnings at $2.06 per share on revenue of $25.22 billion before the opening bell. Home Depot shares fell 0.04 percent to $191.00 in after-hours trading.
Switch Inc (NYSE: SWCH) reported weaker-than-expected earnings for its first quarter on Monday. Switch shares dropped 7.18 percent to $14.36 in the after-hours trading session.
Analysts are expecting Boot Barn Holdings, Inc. (NYSE: BOOT) to have earned $0.16 per share on revenue of $163.65 million in the latest quarter. Boot Barn will release earnings after the markets close. Boot Barn shares gained 1.4 percent to $21.80 in after-hours trading.
Famous Dave’s of America, Inc. (NASDAQ: DAVE) reported upbeat earnings for its first quarter on Monday. Famous Dave’s of America shares gained 7.69 percent to $8.40 in the after-hours trading session.
Before the markets open, Eagle Materials Inc (NYSE: EXP) is estimated to report quarterly earnings at $1.08 per share on revenue of $306.04 million. Eagle Materials shares fell 0.09 percent to $105.72 in after-hours trading.

Find out what's going on in today's market and bring any questions you have to Benzinga's PreMarket Prep.

Pfenex Inc (NYSE: PFNX) shares surged over 25 percent in after-hours trading after the company announced the positive top-line PF708 study results in Osteoporosis patients that showed no imbalances in severity or incidence of adverse events. Pfenex shares climbed 25.41 percent to $7.65 in the after-hours trading session.
Analysts expect AZZ Inc. (NYSE: AZZ) to report quarterly earnings at $0.44 per share on revenue of $231.53 million before the opening bell. AZZ shares dropped 0.66 percent to close at $45.05 on Monday.
Vipshop Holdings Ltd – ADR (NYSE: VIPS) reported weaker-than-expected earnings for its first quarter on Monday. Vipshop shares dipped 14.45 percent to $12.91 in the after-hours trading session.
After the closing bell, PetIQ, Inc. (NASDAQ: PETQ) is projected to post quarterly earnings at $0.12 per share on revenue of $108.58 million. PetIQ shares rose 1.29 percent to close at $19.63 on Monday.
Restoration Robotics Inc (NASDAQ: HAIR) reported downbeat results for its first quarter on Monday. Restoration Robotics shares dropped 19.77 percent to $3.45 in the after-hours trading session.

Vipshop Stock Fails to Live Up to the Hype

The income statement keeps moving in different directions atVipshop Holdings (NYSE:VIPS). The Chinese online discounter of brand-name apparel posted mixed financial results after Monday’s market close. Net revenue rose 24.6% to $3.2 billion for the first quarter. This is Vipshop’s seventh consecutive quarter of decelerating top-line growth, but the revenue increase actually exceeded the 22.4% increase that analysts were targeting.

It’s another story on the bottom line, as adjusted net income declined 9% to $116 million — or $0.17 a share. Analysts were holding out for $0.18 a share. Vipshop used to routinely beat Wall Street’s profit targets, but it’s now only done that once over the past four quarters.

VIP's page showing shopper photos spelling V-IP.

Image source: Vipshop Holdings.

Shopping around

Vipshop’s client base is holding steady. The number of active customers over the trailing 12 months has risen just 2% to 56.6 million. Vipshop’s revenue growth is tied almost entirely to a 25% increase in orders and a 25% increase in revenue per customer. That’s good — and bad — as it suggests that Vipshop is more at the mercy of the repeat business of existing customers than new shoppers.

It gets worse. Vipshop shares were racing higher earlier this year — for the first time after more than doubling in three consecutive years through 2014 — after announcing a partnershipwith JD.com (NASDAQ:JD) and Tencent Holdings (NASDAQOTH:TCEHY). Vipshop rallied when the deal was announced, with JD.com and Tencent investing a combined $863 million in Vipshop. The partnership was supposed to give Vipshop more visibility on the platforms of its new larger investors, and Monday Vipshop spelled out how it’s been on JD’s app homepage since mid-March and an entry in Tencent’s WeChat wallet since early April. This should’ve been the formula to breathe new life into its slowing sales growth, but this doesn’t seem to be the case.

Vipshop’s guidance for the current quarter calls for 17% to 22% in revenue growth. Vipshop has been conservative in the past, but even the high end of this range suggests we’re eyeing an eighth consecutive quarter of decelerating growth. With a presence on JD.com and Tencent, slowing growth isn’t a good look.

Investors have already accepted that earnings growth will be a challenge in the near term. Vipshop’s earnings have declined for four straight quarters. The competitive marketplace is dictating heavy promotional activity to get noticed, and margins are getting squeezed in the process. However, slowing sales — and analysts were already perched at the high end of Vipshop’s net revenue range — nip the initial enthusiasm of the collaboration with JD.com and Tencent.

Vipshop Stock Fails to Live Up to the Hype

The income statement keeps moving in different directions atVipshop Holdings (NYSE:VIPS). The Chinese online discounter of brand-name apparel posted mixed financial results after Monday’s market close. Net revenue rose 24.6% to $3.2 billion for the first quarter. This is Vipshop’s seventh consecutive quarter of decelerating top-line growth, but the revenue increase actually exceeded the 22.4% increase that analysts were targeting.

It’s another story on the bottom line, as adjusted net income declined 9% to $116 million — or $0.17 a share. Analysts were holding out for $0.18 a share. Vipshop used to routinely beat Wall Street’s profit targets, but it’s now only done that once over the past four quarters.

VIP's page showing shopper photos spelling V-IP.

Image source: Vipshop Holdings.

Shopping around

Vipshop’s client base is holding steady. The number of active customers over the trailing 12 months has risen just 2% to 56.6 million. Vipshop’s revenue growth is tied almost entirely to a 25% increase in orders and a 25% increase in revenue per customer. That’s good — and bad — as it suggests that Vipshop is more at the mercy of the repeat business of existing customers than new shoppers.

It gets worse. Vipshop shares were racing higher earlier this year — for the first time after more than doubling in three consecutive years through 2014 — after announcing a partnershipwith JD.com (NASDAQ:JD) and Tencent Holdings (NASDAQOTH:TCEHY). Vipshop rallied when the deal was announced, with JD.com and Tencent investing a combined $863 million in Vipshop. The partnership was supposed to give Vipshop more visibility on the platforms of its new larger investors, and Monday Vipshop spelled out how it’s been on JD’s app homepage since mid-March and an entry in Tencent’s WeChat wallet since early April. This should’ve been the formula to breathe new life into its slowing sales growth, but this doesn’t seem to be the case.

Vipshop’s guidance for the current quarter calls for 17% to 22% in revenue growth. Vipshop has been conservative in the past, but even the high end of this range suggests we’re eyeing an eighth consecutive quarter of decelerating growth. With a presence on JD.com and Tencent, slowing growth isn’t a good look.

Investors have already accepted that earnings growth will be a challenge in the near term. Vipshop’s earnings have declined for four straight quarters. The competitive marketplace is dictating heavy promotional activity to get noticed, and margins are getting squeezed in the process. However, slowing sales — and analysts were already perched at the high end of Vipshop’s net revenue range — nip the initial enthusiasm of the collaboration with JD.com and Tencent.