Please ensure Javascript is enabled for purposes of website accessibility

Why Baozun Stock Gained 30.5% in March

By Keith Noonan – Apr 13, 2018 at 10:36AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chinese e-commerce platform is serving up impressive growth and still has room to run.

What happened

Baozun (BZUN 1.43%) stock rose 30.5% in March, according to data provided by S&P Global Market Intelligence.

BZUN Chart

Data source: BZUN data by YCharts.

The e-commerce company's shares popped following strong quarterly results and guidance and are up roughly 210% over the last year.

An illustration of a shopping cart and a mobile phone.

Image source: Getty Images.

So what

Baozun published fourth-quarter and full-year earnings on March 6 and delivered profits that were significantly better than the market's expectations. The average analyst estimate had called for earnings per share of $0.31, but actual earnings per share for the December-ended quarter came in at $0.42. Sales for the period missed the average analyst estimate by roughly $4.6 million but were still up roughly 23% year over year and not cause for concern in light of the earnings beat.

Now what

Baozun has been making steady progress in increasing its number of brand partners, and it should be able to continue adding customers as more businesses aim to ride momentum in Chinese e-commerce. The country's online-retail market is already the world's largest and still has a long runway for growth ahead, and Baozun is positioned to leverage its competitive advantages to benefit from industry tailwinds and continue increasing sales volume on its platform.

The company is also moving away from storing and shipping items from its own warehouses and toward simply connecting retail brands with customers through its sales platform. That's a move that should have a substantially beneficial impact on margins, and I think that Baozun stands out as a top idea for investing in the growth of Chinese e-commerce.

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Baozun Stock Quote
$6.37 (1.43%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.