China-based online discount retailer Vipshop (NYSE:VIPS) has achieved decent growth over the past few years. However, increasing regulatory pressure has diminished investors’ attention in the stock over the past several months. So, having declined 29.4% so far this year, can the stock’s price rebound in the near-term. Let’s discuss.Headquartered in Guangzhou, China, Vipshop Holdings Limited (VIPS) pioneered the online discount retail model in China, providing special offers and deep discounts on branded products. Leveraging its unique business model, its business has grown significantly over the past few years. Its revenue and EPS have grown at 13.2% and 47.2% CAGRs, respectively, over the past three years. However, its shares have been on a downtrend lately amid increasing regulatory pressures on its business in the United States and its home country.
The stock has lost 44.6% over the past three months and 15.3% over the past month to close yesterday’s trading session at $19.85. It is currently trading 56.8% below its $46 all-time high, which it hit on March 23, 2021.
Even though VIPS reported impressive financials for its first fiscal quarter (ended March 31, 2021), it provided only moderate sales guidance for the second quarter. The company said it expects its revenue to be between RMB 28.90 billion ($4.46 billion) and RMB 30.10 billion ($4.65 billion) in the second quarter. So, the stock’s near-term prospects look uncertain.