Why I Bought More Baozun Shares After a Disappointing Third Quarter
Baozun (NASDAQ: BZUN) saw its stock get crushed after its quarterly earnings report arrived on Nov. 21 with a sales miss and weaker-than-expected guidance. The company provides help creating online stores and other e-commerce services, and has sometimes been referred to as "China's Shopify." It's been one of my favorite foreign-market growth picks, but I'm currently in the red on my investment and understand that there could be more volatility ahead.
Revenue for the quarter rose roughly 35% to about 1.5 billion yuan ($210.3 million), but top-line performance missed the average analyst's call for revenue of $214 million. The company posted adjusted earnings of $0.14 per American depositary share for the period, which represented 7.7% year-over-year growth and met the market's target. But analysts responded to the quarterly report and earnings call by slashing their full-year earnings targets.
Weaker-than-expected sales guidance from the company and a big analyst-side earnings revision sent the stock tumbling. The impact of an unnamed electronics brand leaving the platform wasn't encouraging, either. There are elements from Baozun's recent earnings release that raise questions and have dented confidence in the stock, but I responded by adding to my position in the company. Here's why.
Source Fool.com