As digital technology solution companies continue to boom amid the COVID-19 pandemic, Baozun’s (NASDAQ: BZUN) latest earnings prove that its stock is a buy right now. We all know it’s been a great year for Chinese e-commerce companies in particular, and Baozun was no different. As millions of people were locked indoors, retailers soon realized the importance of e-commerce operations, and those companies who had no presence online or those that needed further help looked to technology companies like Baozun for solutions.
Baozun stock rose by 12.6% last month alone, let’s see how they performed in Q3.
Baozun’s Q3 earnings report highlights
The consensus estimates on Wall Street expected to see Baozun’s earnings per share come in at $0.21 on revenue of $271 million. However, the e-commerce company reported non-GAAP earnings of $0.23 on total revenue of $269.4 million in its third quarter, representing a 21% increase in revenue year-over-year (YoY). Baozun recorded that non-GAAP income from operations was $16.4 million, up 47% (YoY). The company also added more brand partners in its third quarter, bringing its total to 253.
Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun, commented on the rise in popularity of e-commerce: ‘‘In navigating the post-COVID recovery in China, e-commerce, particularly brand e-commerce and digitalization, is becoming a more significant part of everyday life.’’
Mr. Robin Lu, Chief Financial Officer of Baozun explained that Baozun “delivered another solid quarter, with year-over-year GMV growth of 19% and net revenue growth of 22%.’ Lou went on to state that despite challenges this quarter, Baozun’s ‘technology infrastructure, category mix optimization, and innovation of its business model’ has greatly enhanced the company’s operating efficiency.
All in all, it was a pretty good quarter for Baozun. However, if you want to take a deeper dive into the company’s third-quarter financials, you can do so here. If you’re not too sure about how to properly follow earnings reports, check out our earnings season cheat sheet. It’ll answer everything you need to know about earnings.
How much has Baozun grown this year?
At the time of writing, Baozun stock has grown almost 8% since the start of January 2020 and is worth $40.30 per share.
Who are Baozun’s competitors?
Baozun’s main competitors include Alibaba, JD.com, and Tenovia.
Is Baozun a good long-term investment?
As pandemic impacts fade and recovery in luxury, fashion, and cosmetic industries are expected to continue to grow, Baozun believes that topline growth will return to 30% year-over-year in 2021. It may not be the largest e-commerce company in China, but analysts predict that Baozun’s earnings will double over the next few years, indicating a very optimistic future ahead.
Financial experts have also predicted that China will be the only country in the world to witness economic growth this year. COVID-19 had a massive impact on retail sales in China, which dropped 20% in January and February during the height of the country’s lockdown. However, China’s retail industry has bounced back very well, Baozun could very well be the ideal investment for those looking to buy into the next giant e-commerce company.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Financial Writer at MyWallSt
Nicole's favorite stock is Etsy because she loves its original and handmade items. She believes people are going to stop buying mass-produced items and start purchasing ‘one of a kind’ fashions and furnishings. In a world of sameness, Etsy has the advantage.