Vipshop downgraded at UBS as competition slows growth

Expecting user and revenue growth to slow to the single digits for the next few quarters, UBS downgrades Vipshop from Buy to Neutral with a $17 price target.

The firm notes that Vipshop provided “disappointing” third-quarter revenue guidance for 5% to 10% year-over-year growth, well below the historical norm of low-teens growth, which can’t fully be explained by tougher comps since VIPS benefitted from the pandemic-driven shift towards e-commerce.

“We believe increasing competition from e-commerce live streaming is an issue, and could limit VIPS’s long term growth, as multiple apps go after a value-oriented shoppers,” says UBS.

Vipshop shares are down 2.4% pre-market to $15.30.

Last month, Vipshop reported a second-quarter earnings miss.

Author: Brandy Betz, Seeking Alpha

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