Oppenheimer Cuts Dangdang Price Target Following 3Q14 Results, But Remains Positive

Oppenheimer analyst Ella Ji reiterated an Outperform rating on E-commerce China Dangdang (NYSE:DANG), but reduced her price target to $13 (from $15), following the company’s third-quarter earnings release. 

Ji wrote, “DANG’s 3Q14 top line beat our estimate by 3%, while non-GAAP EPADS of $0.05 lagged our $0.06E on marketing expenses (33% higher than our est). DANG now targets more younger mobile users.”

The analyst continued, “During the quarter, the company stepped up efforts in 1) re-branding transition, and 2) mobile monetization/ conversion enhancement, and re-balanced resources between general merchandise & marketplace, and mobile & PC. As a result, general merchandise achieved eight- quarter-high rev growth of 42% y/y, and mobile orders surged another 61% q/q. We support mgmt’s strategy to increase market share in the mobile-commerce era, though expect incremental margin pressure in the coming quarters.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ella Ji has a total average return of 16.9% and a 48.0% success rate. Ji is ranked #560 out of 3385 analysts.


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