After reading many comments/reports/targets from analysts on many internet stocks, I conclude again that VIPS is the best in the internet universe for a) growth b) operating leverage c) margin expansion d) exploding profits ...
I expect VIPS to have an earnings power like this
2104 - 2.5
2015 - 5
2016 - 9
2017 - 16
2018 - 30
2019 - 60
2020 - 100
If VIPS hits $100 EPS by 2020, the stock price should be over $5000 per share by then:)
Macquerie says VIPS is trading at 24x 2016 EPS (they expect over $8 EPS for 2016) ... But we all know VIPS blew away all expectations so far!
I understand it is difficult to have crystal ball to see future but I stuck with PCLN AMZ from 2001 levels and been rewarded handsomely ..
I am going to hold VIPS until the story changes or it becomes the next Alibaba story:)
My biggest problem will be the inevitable pull back. Will I get spooked and sell and then comes an other leg up. I was burned by Qwest communication in the late 90's and a few others. However they did not have the sold earnings VIPS has.
I held without being shaken off VIPS for over a year. And I will not get shaken by pullbacks. I am in this all the way UNTIL the company's growth comes down to 20% or less. Then I got to find other growth companies:)
VIPS has that potential ..
From leadership position, they can expand easily into other categories or make right acquisitions
With Harvard CFO at helm, leadership in the space, they can grow to be a mass player ..
2020 - $100 EPS seems like a moonshot, but raise your hands if you foresaw PCLN making $50 EPS?
The biggest concern I have and they also asked it on the call was operating margin. VIPS management seems to understand that they need to really grow fast ; they need to be like wallmart in the us; and have that economics of scale..being so big that they can dictate the pricing from suppliers. You can look at the big players like Bidu which has operating margin of 39% and get an idea of where VIPS needs to be.