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Bear of the Day: Baozun (BZUN)

Kevin Cook
·2-min read

Baozun (BZUN) is a $2 billion provider of digital and e-commerce services in China. The Shanghai-based company's services include website design, development and hosting, information technology infrastructure, customer service, warehousing and logistics services as well as digital marketing.

 

The reason that BZUN has fallen into the cellar of the Zacks Rank is that analyst earnings estimates have dropped significantly.

 

I last wrote about Baozun as the Bear of the Day in early December when shares were still trading above $35. Here's what I noted about this steady earnings decliner...

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Fast-forward to today and BZUN has once again been spending lots of time as a Zacks #5 Rank, even before the company reported earnings on November 21. On that event, shares gapped down from $44 to $36 and subsequently the 2019 EPS estimate has collapsed further from $1.30 to $1.00.

 

The results are confirming what we've seen across the board in Chinese technology stocks as the largest consumer class in the world struggles with a slowing economy and trade disputes.

 

(end of December 6 report excerpt)

 

No doubt the coronavirus epidemic is impacting forward views of the outlook as well.

 

Since that report, 2019's EPS tally has fallen 10% to $0.90 and we should hear confirmation of this in their Q4 report by early March. Meanwhile, full-year 2020 estimates dropped from $1.60 to $1.40.

 

Until visibility on growth in Chinese stocks becomes clearer, it's best to stand aside. The Zacks Rank will let you know.

 

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Baozun Inc. (BZUN) : Free Stock Analysis Report
 
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Zacks Investment Research