The shares of VEREIT Inc. (NYSE:VER) and Vipshop Holdings Limited (NYSE:VIPS) were among the active stocks of the last trading sessions. VEREIT Inc. (NYSE:VER) declined to -3.18% closing at the price of $7.01 whereas the shares of Vipshop Holdings Limited (NYSE:VIPS) declined -6.18% with the decrease of -0.33 points closing at the price of $5.01. VEREIT Inc. has currently increase 4.78% in its stock over the period of 6-months while its rival Vipshop Holdings Limited subtracted -69.73% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of VEREIT Inc. (NYSE:VER) is 1.9% while the ROI of Vipshop Holdings Limited (NYSE:VIPS) is 7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VER’s EBITDA Margin is 12 whereas VIPS’s is 6.5.
Both the profitability ratios suggest a mixed sentiment for VEREIT Inc. (NYSE:VER) and Vipshop Holdings Limited (NYSE:VIPS).
EPS & Surprise Factor
VEREIT Inc. (NYSE:VER) reported $-0.09/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.01/share Thus lagging the analyst Estimates with a Surprise Factor of -800 Percent. While, Vipshop Holdings Limited (NYSE:VIPS) reported EPS of $0.12/share in the last quarter. The analysts projected EPS of $0.14/share depicting a Surprise of -14.3 Percent.
Taking a look at Earnings per Share, Vipshop Holdings Limited tends to be beating the analyst estimates more than VEREIT Inc.. so VIPS is more profitable than VER.
Technical Analysis of VEREIT Inc. & Vipshop Holdings Limited
Moving average convergence divergence (MACD) shows that VEREIT Inc. (NYSE:VER) is on a PRICE RELATIVITY trend While Vipshop Holdings Limited (NYSE:VIPS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the VEREIT Inc. was in BEARISH territory and Vipshop Holdings Limited was in BEARISH territory.
VER’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While VIPS’s candle is BEARISH with HIGH.
EPS Growth Rate: VER’s 5% versus VIPS’s 0.14%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of VEREIT Inc. (NYSE:VER) is predicted at 5% while Vipshop Holdings Limited (NYSE:VIPS) stands at 0.14%. These numbers suggest that VER is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of VER stands at 0 while VIPS is at 1.1 whereas the debt ratio of the prior is 0.81 while the debt ratio of the later is 0.41.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.6 for VER and 2.6 for VIPS which means VER has Hold rating whereas VIPS has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for VER is $8.28 which is 15.34% of its current price while VIPS has price target of 10.04 which is 50.1% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
VER currently has price to earning P/E ratio of 0 whereas VIPS has 10.33 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 7.22.
The price to Book P/B for VER is 0.91, Price to Sale is at 5.42 and for VIPS these ratios stand at 1.42 and 0.3.