Why VipShop Shares Jumped

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 Vipshop Holdings were moving higher again today, finishing up 11% after an upgrade this morning.

So what: Citigroup bumped up its price target on the Chinese online retailer from $50 to $85 due to improved operational efficiency. The bank's analysts said that the biggest obstacle to Vipshop's growth was warehouse capacity, but the company has plans to more than double its warehouse space over the next three years. Citigroup also said it expects revenue to grow by 130% this year, 70% in 2014, and 48% in 2015.

Now what: Vipshop shares have soared this year as the upstart Chinese vendor has exceeded estimates in three of its last four reports. Sales have grown quickly, and profits seem to be finally catching up as the company is poised to reach nearly a dollar in EPS this year. Vipshop will report third-quarter earnings next Monday. Analysts expect a per-share profit of $0.21 on sales of $364.5 million. We could see shares jump once again if Vipshop beats estimates.

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The article Why VipShop Shares Jumped originally appeared on Fool.com.

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