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Bull Of The Day VTEX (VTEX)

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VTEX (VTEX - Free Report) is a Zacks Rank #1 (Strong Buy) that has an F for Value and a B for Growth.  This is a software-as-a-service digital commerce platform for retailers.  VTEX helps companies develop a commerce strategy and build online stores and market their product or service. Let’s explore more about this company in this Bull of The Day article.

Description

VTEX provides software-as-a-service digital commerce platform for enterprise brands and retailers. Its platform enables its customers to execute its commerce strategy, including building online stores, integrating and managing orders across channels, and creating marketplaces to sell products from third- party vendors. The company was founded by Geraldo do Carmo Thomaz Junior and Mariano Gomide de Faria in 2000 and is headquartered in London, the United Kingdom.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

VTEX (VTEX - Free Report) has a solid earnings history with the company topping the Zacks Consensus in each of the last four quarters.

Over the course of the last four quarters the average positive earnings surprise works out to be 177%.

Earnings Estimates Revisions

Earnings estimates revisions is what the Zacks Rank is all about. 

Annual Estimates are moving higher for VTEX.

This quarter has increased from a loss of  $0.03 to breakeven.

Next quarter has moved from $0.01 to $0.02.

The full year 2024 flipped from a loss of $0.03 to a gain of $0.06 over the last 60 days.

Next year has also moved up from $0.11 to $0.15 over the last 60 days.

Growth

For 2024 the company is expected to show 16% growth with $234 million in sales.  Next year that number grows to $279 million for a 19.5% increase.

Valuation

The forward PE is 108x and that is is very high and we often see that for companies that just make the switch to profitability.  Price to book is 5x and that metric and given the growth and asset slim business model this is a relatively multiple.  Price to sales is at 5.7x leaves plenty of room for expansion with better revenue metrics.

Margins are looking good with the Zacks site showing operating margins moving from -6.5% to -3.8% and up to +1.5% over the last three quarters.  Growing sales and higher margins will translate to higher earnings per share.


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