VNET Group (NASDAQ:VNET) Shares Gap Down Following Weak Earnings

Key Points

• VNET Group shares fell sharply, opening at $7.00 versus a prior close of $7.92, after the company reported weaker-than-expected quarterly earnings.
• The company posted an EPS loss of $0.08, missing the $0.06 consensus loss estimate, while revenue of $409 million exceeded analysts’ $401.77 million forecast. VNET also reported a negative 22.01% net margin and 31.59% negative return on equity.
• Analyst sentiment remains mixed but leans positive, with a consensus “Moderate Buy” rating and a $17.40 price target; however, one analyst recently downgraded the stock to “Sell,” and an insider sold 60,000 shares.

VNET Group, Inc. - Unsponsored ADR (NASDAQ:VNET - Get Free Report) shares gapped down prior to trading on Tuesday following a weaker than expected earnings announcement. The stock had previously closed at $7.92, but opened at $7.00. VNET Group shares last traded at $7.0950, with a volume of 2,441,930 shares traded.

The information technology services provider reported ($0.08) EPS for the quarter, missing analysts' consensus estimates of ($0.06) by ($0.02). The firm had revenue of $409.00 million for the quarter, compared to analyst estimates of $401.77 million. VNET Group had a negative return on equity of 31.59% and a negative net margin of 22.01%.

Analyst Ratings Changes

Several analysts have recently commented on the stock. Weiss Ratings reaffirmed a "sell (d+)" rating on shares of VNET Group in a report on Wednesday, July 15th. Bank of America set a $16.30 target price on shares of VNET Group and gave the stock a "buy" rating in a report on Tuesday, May 26th. Deutsche Bank Aktiengesellschaft initiated coverage on shares of VNET Group in a research report on Tuesday, July 7th. They set a "buy" rating and a $12.50 target price for the company. Morgan Stanley reaffirmed an "overweight" rating and issued a $16.00 price target on shares of VNET Group in a report on Wednesday, May 27th. Finally, Wall Street Zen downgraded VNET Group from a "hold" rating to a "sell" rating in a research report on Saturday, June 27th. Four equities research analysts have rated the stock with a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, VNET Group currently has a consensus rating of "Moderate Buy" and a consensus price target of $17.40.

Insider Activity at VNET Group

In other news, Director Sean Shao sold 60,000 shares of the firm's stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $1.71, for a total transaction of $102,600.00. Following the sale, the director owned 983,820 shares of the company's stock, valued at $1,682,332.20. This trade represents a 5.75% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 12.10% of the stock is owned by insiders.

Hedge Funds Weigh In On VNET Group

Several large investors have recently made changes to their positions in the company. Leonteq Securities AG acquired a new stake in VNET Group during the first quarter valued at $25,000. Global Retirement Partners LLC acquired a new position in shares of VNET Group in the fourth quarter worth about $27,000. EverSource Wealth Advisors LLC raised its position in shares of VNET Group by 52.2% in the second quarter. EverSource Wealth Advisors LLC now owns 4,157 shares of the information technology services provider's stock worth $29,000 after acquiring an additional 1,426 shares during the period. Parallel Advisors LLC boosted its stake in shares of VNET Group by 26.8% during the 1st quarter. Parallel Advisors LLC now owns 5,495 shares of the information technology services provider's stock worth $46,000 after acquiring an additional 1,160 shares in the last quarter. Finally, Allianz SE purchased a new stake in shares of VNET Group during the 4th quarter worth about $50,000. 72.83% of the stock is currently owned by institutional investors and hedge funds.

VNET Group Price Performance

The company has a current ratio of 0.99, a quick ratio of 0.99 and a debt-to-equity ratio of 3.99. The stock has a market capitalization of $1.92 billion, a price-to-earnings ratio of -5.19 and a beta of 0.32. The stock has a 50-day moving average price of $7.88 and a 200 day moving average price of $9.25.

About VNET Group

VNET Group, Inc NASDAQ: VNET is a leading carrier-neutral internet data center (IDC) services provider in China. Established in 1999 and headquartered in Beijing, the company delivers a full spectrum of infrastructure solutions that support the growing digital economy. Its core offerings include data center colocation, managed hosting, network connectivity, and disaster recovery services designed to meet the performance and reliability requirements of enterprise and internet content customers.

The company's product portfolio spans private cloud, public cloud and hybrid cloud deployments, enabling clients to scale computing resources on demand.

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