fbpx

STOCK MARKET NEWS AND ANALYSIS

Category archive

MARKET MOVING

Today's most important financial news and how it impacts investors.

Qudian is down over 20% after earnings miss

in EARNINGS/INVESTING IDEAS/MARKET MOVING by

Qudian Inc. (NYSE:QD) is reported Q3 earnings results on November 18, 2019. Qudian is a provider of online small consumer credit in China.

The company is reported earnings of $0.46/share on revenue of $362.5 million. The earnings report missed analyst expectations of earnings per share (EPS) of $0.48/share based on a poll of 4 analysts representing growth of 53.8% over the same quarter last year when the company reported earnings of $0.31/share.

The company also missed revenue expectations — analysts were expecting the company to report revenue of around $307.3 million for the quarter implying a year-over-year (YoY) growth of 9.4%. Last year the company reported $280.8 million in revenue for the quarter.

Expected to report EPS growth of $0.17/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $307.33 $280.83 9.4%
EPS $0.48 $0.31 53.8%

Qudian is down over 20% after the earnings miss. The company’s CFO, Mr. Carl Yeung, remarks were optimistic but failed to appease investors — “We delivered another quarter of solid Non-GAAP net income of RMB1,061.8 million, a 52.9% year-over-year increase despite the overall industry credit deterioration driven by the macro economic environment and reduced liquidity as non-complaint player exit the credit market.”

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 7 tracked quarters, and missed expectations 1 quarters.

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.48 $0.46 -4.2% Missed
Q2, 2019 $0.53 $0.58 9.3% Beat
Q1, 2019 $0.38 $0.47 25.9% Beat
Q4, 2018 $0.35 $0.38 9.8% Beat
Q3, 2018 $0.29 $0.31 9.2% Beat
Q2, 2018 $0.27 $0.33 22.7% Beat
Q1, 2018 $0.17 $0.16 -4.2% Missed
Q4, 2017 $0.24 $0.27 15.9% Beat

What are your expectations from Qudian for earnings next quarter? Let us know in the comments!

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price reacted by increasing by 2.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-16 $8.69 $8.92 2.6% Increase
2019-05-20 $6.84 $7.09 3.7% Increase
2019-03-18 $5.35 $5.44 1.7% Increase
2018-11-21 $4.29 $5.87 36.8% Increase

Fundamentals And Technical Analysis

Qudian is currently trading at $5.88/share, down -21.67% for the day. The company is trading at approximately 63% of its 52 week high of $9.21/share.

The share price as of close on November 17, 2019 implies a price-to-earnings (P/E) multiple of 4.2x and a forward P/E multiple of 0.5x.

Qudian’s current share price also implies a price-to-book (P/B) multiple of 1.2x. The following table summarizes some other key fundamental ratios:

Data as of November 17, 2019
Metric Value
Last Fiscal Period FY2019.Q2
Period End Date June 30, 2019
Stock Price (Current) $7.50
P/E Ratio 4.2x
P/E Ratio (Fwd) 0.5x
PEG Ratio 0.0
Total Debt to Capital (%) 20.6%
Levered Free Cash Flow zero
Enterprise Value / EBITDA 3.9x

Company Profile: Qudian Inc.

Qudian Inc. is a mid-cap stock with a market capitalization of $2.094 billion and a total enterprise value of $2.276 billion. The company operates in the Financials sector and Consumer Finance industry.

Qudian Inc. provides online small consumer credit products in the People’s Republic of China. It uses big data-enabled technologies, including artificial intelligence and machine learning to transform the consumer finance experience. The company offers small credit products, such as cash credit products; merchandise credit products to finance borrowers’ direct purchase of merchandise offered on its marketplace on installment basis; and budget auto financing products. In addition, it operates a platform for loan recommendations and referrals.

Qudian Inc. was founded in 2014 and is headquartered in Xiamen, the People’s Republic of China.

Wanda Sports Group Stock Price Plummets After Earnings

in EARNINGS/INVESTING IDEAS/MARKET MOVING by

Wanda Sports Group Company Limited (NASDAQGS:WSG) reported Q3 earnings results this morning. Wanda Sports Group is a leading global sports events, media and marketing platform headquartered in China.

According to Business Wire WSG completed its IPO on July 26, 2019, offering 23.8 million American Depositary Shares (“ADSs”) at $8.00 per ADS. The IPO raised over $190 million in net proceeds. On the first day of trading the company’s stock price opened at around $6/share and at the current trading price of $2.83 represents a decline of approximately 65%.

Since the IPO, the company has had a tumultuous ride. The company’s CEO resigned as the company reported dismal financial results for Q2 of 2019, including a 30% year-over-year decline in total revenue.

The company’s loss for the latest quarter was €31.2 million (US$34.0 million), compared to a profit of €13.1 million for the third quarter of 2018. Management attributed this loss primarily to finance cost relating to the company’s unsecured senior loan facility; the stock-based compensation for our Management Equity Incentive Plan arise from IPO and the increase in income tax expenses. Other key highlights from the report:

  • Total revenue was €245.2 million (US$267.4 million), representing an increase of 8% year-over-year.
  • Adjusted EBITDA was €39.3 million (US$42.8 million) in the third quarter of 2019, substantially similar to the third quarter
    of 2018.

After the last earnings report for the period ending June 30, 2019, the stock price also reacted by falling by -1.3%.

Fundamentals And Technical Analysis

Wanda Sports is currently trading at $2.83/share, down over 12% for the day. The company is trading at approximately 35% of its IPO price of $8.00/share.

The share price as of close on Friday November 17, 2019, implies a price-to-earnings (P/E) multiple of 8.8x and a forward P/E multiple of 16.7x. Wanda Sports’s current share price also implies a price-to-book (P/B) multiple of 1.2x. The following table summarizes some other key fundamental ratios:

Data as of November 17, 2019
Metric Value
Last Fiscal Period FY2019.Q2
Period End Date June 30, 2019
Stock Price (Current) $3.24
P/E Ratio 8.8x
P/E Ratio (Fwd) 16.7x
PEG Ratio 0.1
Total Debt to Capital (%) 71.4%
Levered Free Cash Flow $42.647 million
Enterprise Value / EBITDA 11.1x

Company Profile: Wanda Sports Group Company Limited

Wanda Sports Group Company Limited is a small-cap stock with a market capitalization of $388.2 million and a total enterprise value of around $1 billion. The company operates in the Communication Services sector and Entertainment industry.

Wanda Sports Group Company Limited operates as a sports events, media, and marketing platform worldwide. The company engages in the rights distribution, broadcast hosting, digital media and entertainment, program production, event operations and licensing, and brand development and sponsorship activities. It operates through three segments: Mass Participation; Spectator Sports; and Digital, Production, Sports Solutions (DPSS).

The Mass Participation segment organizes, operates, and monetizes a range of mass participation sports, including triathlon, running, mountain biking, road cycling, obstacle course racing, and trail running through a portfolio of brands and other intellectual property.

The Spectator Sports segment monetizes rights acquired from rights owners under contractual arrangements through media distribution, sponsorship, and marketing activities; and provides services to its rights-in partners and rights-out clients covering event operation and support, media production, digital solutions, and ancillary services. This segment includes a portfolio of sports, such as football, and winter and summer sports.

The DPSS segment offers a suite of specialized sports-related services, including digital media solutions, media and program production, host broadcasting, marketing, event operations, brand development, and advertising solutions.

The company was founded in 2018 and is headquartered in Beijing, the People’s Republic of China. Wanda Sports Group Company Limited operates as subsidiary of Wanda Holdings Group Co. Ltd.

LexinFintech Up 3.8% after Earnings

in EARNINGS/INVESTING IDEAS/MARKET MOVING by

LexinFintech Holdings Ltd. (NASDAQGM:LX) is consumer finance platform for educated young adults in China. LexinFintech reported Q3 earnings results this morning on November 18, 2019. Total operating revenue reached RMB3.2 billion. At the time of this writing, the stock price is $12.98/share, up 3.84% for the day.

Key highlights from the strong earnings report are as follows:

  • Financial services income reached RMB2.2 billion ($313 million), increasing 76.0% from the third quarter of 2018.
  • Loan facilitation and servicing fees in financial services income reached RMB1.9 billion ($270 million), increasing 238% from the third quarter of 2018.
  • Gross profit reached RMB1.7 billion ($242 million), representing an increase of 122% from the third quarter of 2018.
  • Net income was RMB724 million ($103 million), representing an increase of 62.0% from the third quarter of 2018.

Earnings Call Trends

Historically, management has exceeded analyst expectations 3 out of the last 6 tracked quarters, and missed expectations 3 quarters.

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q1, 2019 $0.45 $0.51 14.3% Beat
Q4, 2018 $0.36 $0.58 62.8% Beat
Q3, 2018 $0.26 $0.28 6.9% Beat
Q2, 2018 $0.23 $0.21 -7.5% Missed
Q1, 2018 $0.15 $0.08 -48.3% Missed
Q4, 2017 $0.12 $0.10 -16.9% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-30 $9.83 $10.25 4.3% Increase
2019-05-17 $13.68 $12.99 -5.0% Decline
2019-03-14 $11.15 $10.53 -5.6% Decline
2018-11-14 $10.17 $10.05 -1.2% Decline

Fundamentals And Technical Analysis

LexinFintech is currently trading at $12.98/share, up 3.84% for the day. The company is trading at approximately 88.5% of its 52 week high of $14.66/share. Prior to today’s report, the company’s stock price was up 27.2% since the last earnings report and up 3.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 78.16 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 7.1x and a forward P/E multiple of 6.4x. LexinFintech’s current share price also implies a price-to-book (P/B) multiple of 3.0x. The following table summarizes some other key fundamental ratios:

Data as of November 16, 2019
Metric Value
Last Fiscal Period FY2019.Q2
Period End Date June 30, 2019
Stock Price (Current) $12.50
P/E Ratio 7.1x
P/E Ratio (Fwd) 6.4x
PEG Ratio 0.3
Total Debt to Capital (%) 21.3%
Levered Free Cash Flow zero
Enterprise Value / EBITDA 9.5x

Company Profile: LexinFintech Holdings Ltd.

LexinFintech Holdings Ltd. is a mid-cap stock with a market capitalization of $2.234 billion and a total enterprise value of $2.697 billion. The company operates in the Financials sector and Consumer Finance industry.

A few key slides from the the company’s latest investor presentation:

LexinFintech-WhoWeAre-min

LexinFintech-Business-min

LexinFintech Holdings Ltd., through its subsidiaries, operates as an online consumer finance platform for young adults in the People’s Republic of China. The company operates Fenqile.com, a retail and online consumer finance platform that offers installment purchase loans, personal installment loans, and other loan products, as well as provides online direct sales with installment payment terms.

The company also matches customer loans with diversified funding sources, including individual investors on its Juzi Licai online investment platform, third-party commercial banks, consumer finance companies, institutional funding partners in its direct lending programs, investors of its asset-backed securities, and other licensed financial institutions.

The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People’s Republic of China.

Go to Top