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Why Yatsen Stock Soared Today

By Jon Quast - Updated Feb 5, 2021 at 11:32AM

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This direct-to-consumer cosmetics company in China is starting to get some bullish shout-outs.

What happened

Shares of Yatsen Holding (YSG 8.51%), a direct-to-consumer (DTC) cosmetics company in China, were soaring on Friday, possibly because it's starting to attract some positive attention after initially flying under the radar. As of 11 a.m. EST today, the stock was up 16%.

So what

Yatsen had its initial public offering in November. Despite its successful IPO, this company simply doesn't have the name recognition in the U.S. that many other high-flying IPOs have. Therefore, a lot of people don't know about it. But that could be changing. Yesterday, for the second time in three weeks, Investor's Business Daily highlighted the stock after the market closed.

A businesswoman draws an upward arrow on a bar chart displayed on a transparent touchscreen.

Image source: Getty Images.

Absent other news, it appears this shout-out was enough to send Yatsen stock soaring today. That wouldn't be enough for most stocks, but for a stock with low trading volume like Yatsen, it's enough to send shares higher in the short term.

Now what

Long term, it's always business results that matter, Yatsen included. And regarding its business, this could be an international stock worth getting to know. The company was founded in 2016, and it already has one of the most popular cosmetic brands in China: Perfect Diary. And thanks to this popularity, the company has already generated $482 million in revenue through the first three quarters of 2020, despite being just five years old.

Yatsen's growth is impressive, but it could be slowing. The company had 23.4 million DTC customers at the end of 2019, but only added about 100,000 customers in 2020. That user growth is something to watch when it reports earnings soon. 

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