Why Leju Holdings Ltd Shares Jumped Today

Is Leju Holdings' jump meaningful or just another movement?

Steve Symington
Steve Symington
May 20, 2014 at 1:03PM
Technology and Telecom

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Leju Holdings (NYSE:LEJU) jumped 10% early Tuesday after the Chinese real estate services provider reported solid first-quarter results.

So what: Leju's quarterly revenue rose 97% year over year to $78.5 million -- including a 238% boost in e-commerce services revenue to $49.7 million -- which translated to adjusted net income of $7.7 million, or $0.07 per diluted American depositary share. Analysts, on average, were looking for adjusted net income of just $0.03 per share on sales of $66.8 million.

Leju expects fiscal 2014 revenue of $500 million to $520 million, an increase of 49% to 55% from last year. By contrast, analysts had modeled 2014 revenue of $467.84 million.

Now what: Leju CEO Geoffrey He stated in a press release: "We are excited to announce strong growth in our first quarterly report as a public company. We have built a leading O2O real estate services platform through an intense focus on product innovation, execution and via strategic cooperation with China's leading Internet players."

Today's report was solid by any measure. With shares trading at just 10.6 times next year's estimated earnings -- and keeping in mind those estimates are likely to creep higher as analysts digest today's results -- I think Leju should have little trouble rewarding patient long-term shareholders.