VNET Group (NASDAQ:VNET) Trading Down 6% - Should You Sell?

Key Points

• VNET Group's stock price fell 6% during mid-day trading, reaching as low as $8.13, with a significant drop in trading volume compared to its average.
• Wall Street analysts show mixed sentiments, with the company receiving a "sell" rating from Wall Street Zen while Bank of America upgraded its price target to $12.60, suggesting a potential for recovery.
• Despite reporting earnings that missed expectations, VNET Group has announced a stock buyback program, indicating confidence in the company's undervalued shares.

VNET Group, Inc. - Unsponsored ADR (NASDAQ:VNET - Get Free Report)'s share price traded down 6% during mid-day trading on Tuesday . The company traded as low as $8.13 and last traded at $8.14. 1,784,332 shares were traded during mid-day trading, a decline of 77% from the average session volume of 7,790,476 shares. The stock had previously closed at $8.66.

Wall Street Analysts Forecast Growth

A number of research analysts recently issued reports on the company. Wall Street Zen cut VNET Group from a "hold" rating to a "sell" rating in a report on Saturday, August 23rd. Bank of America lifted their price objective on VNET Group from $11.80 to $12.60 and gave the stock a "buy" rating in a research report on Friday, August 22nd. Two investment analysts have rated the stock with a Strong Buy rating and five have assigned a Buy rating to the stock. Based on data from MarketBeat, VNET Group has a consensus rating of "Buy" and an average price target of $9.96.

VNET Group Stock Performance

The stock has a 50-day moving average of $7.83 and a 200 day moving average of $7.72. The company has a debt-to-equity ratio of 2.40, a current ratio of 0.97 and a quick ratio of 0.97. The stock has a market capitalization of $2.18 billion, a price-to-earnings ratio of -100.69, a price-to-earnings-growth ratio of 6.02 and a beta of 0.16.

VNET Group (NASDAQ:VNET - Get Free Report) last posted its earnings results on Thursday, August 21st. The information technology services provider reported ($0.01) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.02 by ($0.03). The company had revenue of $339.65 million for the quarter, compared to analyst estimates of $2.27 billion. VNET Group had a return on equity of 0.98% and a net margin of 0.74%. VNET Group has set its FY 2025 guidance at EPS. On average, analysts expect that VNET Group, Inc. - Unsponsored ADR will post -0.06 EPS for the current year.

VNET Group declared that its board has initiated a stock buyback program on Friday, June 27th that authorizes the company to buyback $0.00 in shares. This buyback authorization authorizes the information technology services provider to purchase shares of its stock through open market purchases. Stock buyback programs are generally a sign that the company's management believes its shares are undervalued.

Hedge Funds Weigh In On VNET Group

Several institutional investors have recently modified their holdings of the stock. Triata Capital Ltd acquired a new position in shares of VNET Group during the 4th quarter worth about $47,377,000. Infini Capital Management Ltd lifted its holdings in shares of VNET Group by 39.2% during the 2nd quarter. Infini Capital Management Ltd now owns 9,758,083 shares of the information technology services provider's stock valued at $67,331,000 after purchasing an additional 2,747,661 shares in the last quarter. Norges Bank bought a new position in shares of VNET Group during the 2nd quarter valued at about $54,199,000. Oxbow Capital Management HK Ltd lifted its holdings in shares of VNET Group by 64.3% during the 2nd quarter. Oxbow Capital Management HK Ltd now owns 5,750,000 shares of the information technology services provider's stock valued at $39,675,000 after purchasing an additional 2,250,000 shares in the last quarter. Finally, Millennium Management LLC lifted its holdings in shares of VNET Group by 3.4% during the 4th quarter. Millennium Management LLC now owns 5,578,371 shares of the information technology services provider's stock valued at $26,441,000 after purchasing an additional 181,749 shares in the last quarter. 72.83% of the stock is currently owned by institutional investors and hedge funds.

VNET Group Company Profile

VNET Group, Inc, an investment holding company, provides hosting and related services in China. It offers managed hosting services consisting of managed retail services, such as colocation services that dedicate data center space to house customers' servers and networking equipment, as well as allow customers to lease partial or entire cabinets for their servers; interconnectivity services that allow customers to connect their servers; value-added services, including hybrid IT, bare metal, firewall, server load balancing, data backup and recovery, data center management, server management, and backup server services; cloud services that allow customers to run applications over the internet using IT infrastructure; and VPN Services that extend customers' private networks by setting up connections through the public internet.

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