RERE: 1Q24 Earnings Preview: Trimming 2024 EPS Estimate Ahead of 1Q24 Earnings

Zacks Small Cap Research05-07

By Michael Kim NYSE:RERE READ THE FULL RERE RESEARCH REPORT Ahead of 1Q24 earnings to be released pre-market open on Monday, May 20, 2024, we are updating our model to reflect first quarter ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nRERE: 1Q24 Earnings Preview: Trimming 2024 EPS Estimate Ahead of 1Q24 Earnings\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-07 17:19 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/rere-1q24-earnings-preview-trimming-091900456.html><strong>Zacks Small Cap Research</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>By Michael Kim\n NYSE:RERE\nREAD THE FULL RERE RESEARCH REPORT\nAhead of 1Q24 earnings to be released pre-market open on Monday, May 20, 2024, we are updating our model to reflect first quarter ...</p>\n\n<a href=\"https://finance.yahoo.com/news/rere-1q24-earnings-preview-trimming-091900456.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"RERE","symbol_name":"万物新生","start_time":0,"source_url":"https://finance.yahoo.com/news/rere-1q24-earnings-preview-trimming-091900456.html","article_id":"2433878821","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2433878821","pubTimestamp":1715073540,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Ahead of 1Q24 earnings to be released pre-market open on Monday, May 20, 2024, we are updating our model to reflect first quarter seasonality and the challenging macroeconomic backdrop in China. More specifically, our 1Q24 adjusted EPS estimate remains unchanged at $0.05, as slightly lower revenue assumptions for the quarter were not meaningful enough to move the EPS needle. That said, our full year estimate edges down by a couple of pennies from $0.25 to $0.23 reflecting flatter revenue and margin trajectories for the remainder of the year. Looking out to 2025, our adjusted EPS estimate remains unchanged at $0.38, as does our $4.00 DCF-derived price target.For the quarter, we now forecast total net revenue to come in at RMB 3,562  or $493 million. Our modestly lower forecast reflects three key drivers:. First, ATRenew’s  revenues are typically lowest in the first quarter of the year given the Lunar New Year holiday in China.While RERE has meaningfully outperformed recently, we believe","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"RERE":"万物新生"},"translate_title":"RERE：2024年第一季度收益预览：在2024年第一季度收益之前下调2024年每股收益预期","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RERE":1},"content_text":"By Michael Kim\n NYSE:RERE\nREAD THE FULL RERE RESEARCH REPORT\nAhead of 1Q24 earnings to be released pre-market open on Monday, May 20, 2024, we are updating our model to reflect first quarter seasonality and the challenging macroeconomic backdrop in China. More specifically, our 1Q24 adjusted EPS estimate remains unchanged at $0.05, as slightly lower revenue assumptions for the quarter were not meaningful enough to move the EPS needle. That said, our full year estimate edges down by a couple of pennies from $0.25 to $0.23 reflecting flatter revenue and margin trajectories for the remainder of the year. Looking out to 2025, our adjusted EPS estimate remains unchanged at $0.38, as does our $4.00 DCF-derived price target.\nFor the quarter, we now forecast total net revenue to come in at RMB 3,562 (still within management’s prior guidance range of RMB 3,550 to RMB 3,650) or $493 million. Our modestly lower forecast reflects three key drivers: \n• First, ATRenew’s (NYSE:RERE) revenues are typically lowest in the first quarter of the year given the Lunar New Year holiday in China. \n• Second, macroeconomic conditions remained somewhat mixed in China during the quarter. While GDP data from select provinces ticked higher, the forward outlook remains uncertain in light of lingering concerns around consumer demand/confidence and deflationary risks.\n• Third, 4Q23 volumes and revenues were somewhat skewed by cell phone upgrades from both Apple and Huawei during the quarter, which drove a step-up in trade-in volumes.\nLooking ahead, we still expect quarterly and annual revenue growth of ~25% through 2025 reflecting rising transaction volumes and GMVs for AHS Recycle, as well as higher take rates on average across the B2B and B2C platforms, as integration of ATRenew’s value-added services continues to ramp up.\nTurning to margins, we modestly dialed back our 1Q24 assumptions primarily reflecting lower revenues and stepped-up advertising expenses around the Lunar New Year. For the full year, we now forecast ATRenew’s adjusted operating margin to come in at 2.5%, then trend higher to 3.5% in 2025.\nKey margin expansion drivers include: 1) rising operating leverage reflecting further operation center upgrades; 2) an ongoing focus on driving a more efficient cost structure; 3) increasingly monetizing value-added and advanced logistics services; and 4) a step up in higher-margin refurbishing activity.\nStepping back, we remain optimistic that ATRenew’s differentiated pre-owned consumer electronics transactions and services platform in China will continue to drive outsized growth in transaction volumes, sales, fees, and profits over the long run. \nWhile RERE has meaningfully outperformed recently, we believe current levels for the stock still provide investors with an attractive entry point, as awareness and appreciation of the company’s business model, growth prospects, competitive positioning, and valuation disconnect increasingly take hold. \nOur DCF model suggests a wide disconnect between ATRenew’s fundamentals and the stock’s current price. Furthermore, at ~6x our 2025 adjusted EPS estimate, RERE continues to trade at a meaningful P/E discount to most peer stocks.\nSUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. \n \nDISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.0","shortVersion":"4.24.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2433878821"}