What happened

Shares of the Chinese online real estate platform KE Holdings (BEKE 2.02%) traded 11.6% higher as of 3:02 p.m. EST after the company reported earnings for the third quarter of 2021. An analyst also upgraded its outlook on the stock.

So what

KE Holdings delivered a loss of earnings per American depositary share equivalent to $0.23 on total revenue equivalent to $2.8 billion. Earnings per share missed analyst estimates, while revenue beat.

The loss in the quarter grew significantly from the third quarter of 2020, while total revenue dropped nearly 12% from the same time period. Management is also guiding for fourth-quarter net revenue to drop by more than 30% from the fourth quarter of 2020.

However, analysts at J.P. Morgan today upgraded KE Holdings from a neutral rating to overweight and assigned the company a $30 price target, which implies a roughly 50% upside from its current price.

Blue line with arrow moving upward.

Image source: Getty Images.

Now what

KE Holdings has been wildly volatile this year, at one point trading at nearly $77 per share before falling as low as roughly $17 per share. The problem has been regulators, which have been trying to temper China's shaky housing market.

There's a lot of opportunity in the Chinese real estate market, and KE Holdings is clearly a large player, but unless you really understand how regulation impacts this company, I'd steer clear of KE Holdings because things can change very quickly.