Vipshop Holdings (NYSE:VIPS) hit fresh recent lows last week, taking a hit after posting disappointing quarterly results. A pair of Wall Street firms would go on to downgrade the Chinese online discounter following the financial report. The stock plunged 13.46% on the week.

Vipshop stock closed in the single digits on Friday, something that we haven't seen since 2012. Adjust the stock for Vipshop's 10-for-1 stock split in 2014 -- after its meteoric rise at the time -- and we're still looking at new three-year lows for investors. 

Vipshop's homepage.

Image source: Vipshop Holdings.

Checking out

Revenue growth has been slowing at Vipshop, so the 30% year-over-year uptick wasn't a surprise. It's the fourth straight quarter of decelerating growth and Vipshop's weakest top-line showing as a public company. Most flash sale specialists would love to be sporting double-digit growth, and Vipshop's performance actually plants it at the high end of its earlier guidance calling for 26% to 30% growth for the period.

The real daggers in Vipshop's report are its bottom-line results and in its outlook for the current quarter. Vipshop had to promote aggressively in a Chinese market that has become even more competitive, and building out its infrastructure with more warehouses and a proprietary last-mile delivery network has naturally squeezed margin. Vipshop's adjusted profit of $0.17 a share -- up a mere 8% -- is a far cry from the $0.19 a share that analysts were targeting. Vipshop hadn't missed Wall Street profit target in more than a year before laying an egg on the bottom line last week.

Vipshop's guidance calls for 24% to 28% in year-over-year revenue growth for the current quarter. In other words, the streak of decelerating growth will likely be stretching to five quarters now. 

Wall Street pros weren't impressed. HSBC turned bearish, lowering its rating from Hold to Reduce. John Choi at Daiwa also downgraded the stock following the weak second quarter. He's taking his firm's rating from Buy to Hold, slashing his price target to $10

The sell-off may provide a buying opportunity. The stock is now trading for just 12 times this year's projected earnings and just 10 times next year's target. The rub -- and there's always a rub with a reeling stock -- is that future forecasts will go out the window if margin continues to contract. Vipshop is still growing its orders at a healthy double-digit, but analysts are now concerned about the former dot-com darling's ability to command healthy markups in this competitive climate.

The key here may be the homegrown last-mile delivery network that Vipshop is now using for 95% of its deliveries. It should provide Vipshop with a distinctive advantage, fortifying its moat. We'll find out in the coming quarters how things play out.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.