Critical Profitability Ratio Analysis under Limelight: Vipshop Holdings Limited (NYSE:VIPS)

Vipshop Holdings Limited (NYSE:VIPS) persists its position slightly strong in context of buying side, while shares price build up 4.96% during latest trading session. The VIPS held a rough session during the week but was ready to get some critical analysis. The stock was assessed by a pool of analysts at WSJ and came out with some serious outcomes not to be avoided before making investment. The VIPS ratings chart showed that 6 gave HOLD ratings for the current month as 1 analyst opting for Overweight option for same period, whereas, 1 analyst out of pool gave UNDERWEIGHT rating. For stocks’ current month, 16 analysts opted for BUY ratings as compared to 0 opting for SELL in the same period. The stock price target chart showed average price target of 16.11 as compared to current price of 14.38.

Taking look on per share earnings estimates, its next year first quarter current estimate trend for EPS was for $0.14 and on annual basis FY 2016 estimate trends at current was for $0.63 as compared to one month ago of $0.64, and for next year per share earnings estimates have $0.79.

Analysts Practices; to watch unbiased undervalue securities, there is need to see following technical rations. The firm holds price to earnings ratio of 30.21 that presents much better indication for a stock’s value than the market price alone. Based on historic views, the average P/E ratio in market fluctuates between 15 and 25, but alone low P/E ratio does not necessarily mean that a company is undervalued.

Narrow down focus to other ratios, the Vipshop Holdings Limited (NYSE:VIPS) has current ratio of 1 that indicates if ratio lies in 1.3% to 3% then it is acceptable for both active and passive investors, but sometimes its varies industry to industry. Generally, it indicates good short-term financial strength. To make strengthen these views, the active industry firm has Quick Ratio of 0.70, which indicates firm has sufficient short-term assets to cover its immediate liabilities. In addition, the firm has debt to equity ratio of 0.76, sometimes it remain same with long term debt to equity ratio.

Analysts Pools

The VIPS held a rough session during the week but was ready to get some critical analysis. The stock was assessed by a pool of analysts at WSJ and came out with some serious outcomes not to be avoided before making investment. The VIPS ratings chart showed that 6 gave HOLD ratings for the current month as 1 analyst opting for Overweight option for same period, whereas, 1 analyst out of pool gave UNDERWEIGHT rating. For stocks’ current month, 16 analysts opted for BUY ratings as compared to 0 opting for SELL in the same period. The stock price target chart showed average price target of 16.11 as compared to current price of 14.38.

Taking look on per share earnings estimates, its next year first quarter current estimate trend for EPS was for $0.14 and on annual basis FY 2016 estimate trends at current was for $0.63 as compared to one month ago of $0.64, and for next year per share earnings estimates have $0.79.

Profitability Analysis

To stick with focus on profitability valuation, Vipshop Holdings Limited (NYSE:VIPS) also listed in significant eye catching mover, VIPS attains returns on investment ratio of 16.10%, which suggests it’s viable on security that has lesser ROI.

To strengthen this concept we can use profit margin, which is standing at positive 3.60%, and it is providing insight views about a variety of aspects of a firm’s financial performance. The operating profit margin and gross profit margin can be giving more focus view that is 3.90% and 24% respectively. Turns back to returns ratios, the co’s returns on assets calculated as 16.10%; that gives an idea as to how efficient management is at using its assets to generate earnings. Finally yet importantly, returns on equity stand at 41.80%.

EPS estimates indicating constrictive facts, the current year from sell-side analysts, Price to current year EPS of Vipshop Holdings Limited (NYSE:VIPS) stands at 22.40%, and looking further price to next year’s EPS is 21.36%. While take a short look on price to sales ratio, that was 1.01 and price to earning ration of 30.21 attracting passive investors.

 

About Blake Escott

Blake Escott holds junior writer position in SWR. Before joining Streetwise Report, he was a freelance content Writer. He has high-level copywriting experience and particularly experienced in proofreading and editing. He covers news about different companies including all US market sectors. Interests: Commodities, Energy stocks, Sector-wise Stocks analysis, Utilities

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