Vnet Group Inc Up 1.84% To $3.54 After Earnings Beat

VNET Group Inc - ADR (VNET) reported better than expected earnings this afternoon for Q3 2023.

The consensus among analysts for Vnet Group Inc was for an earnings per share (EPS) loss of $0.07 per share. The firm was able to surpass those projections, reporting an EPS loss of $0.06 per share, a positive surprise of $0.01 (14%). Profits rose 86% year-over-year after reporting an EPS loss of $0.42 per share in its year-ago quarter. The positive growth rate signals that the Technology company is performing well amid recent economic conditions.

Consensus estimates for Vnet Group Inc revenue averaged out to $257 million, with the business managing to beat those expectations with reported third-quarter revenue of $258.6 million. The $1.6 million (1%) positive revenue surprise led to 1% growth year-over-year as the firm reported revenue of $255 million in its year-ago quarter. The higher earnings growth compared to revenue points to Vnet Group Inc improving its profit margin.

The stock is up 1.84% to $3.54 after the report.

The firm's lower revenue growth to earnings signals that the firm has been able to reduce costs and improve its profit margin overall.

The average recommendation from Wall Street analysts was a Buy which may get revised based on this new data.

Trading in the five days leading up to the report earned Vnet Group Inc a Neutral Sentiment Rank from InvestorsObserver.

Vnet Group Inc has been a strong performer over the past few months, garnering a high Long-Term Technical Rank by InvestorsObserver of 84, putting Vnet Group Inc in the top 25% of stocks. The firm set a 52-week low on May 25, 2023 at $2.53 and set a 52-week high on January 20, 2023 at $6.83.

Vnet started as AsiaCloud in 1999, subsequently it moved to the data center business with its first self-developed data center opening in 2010. The company listed (as 21Vianet) on the Nasdaq in April 2011, subsequently changing its name to Vnet Group in 2021. It originally focused on providing data center services such as colocation and cloud services to retail clients in China but added hyperscale customers in 2019 and now counts large Chinese hyperscalers such as Alibaba Cloud, Tencent Cloud, Huawei Cloud and JD Cloud as customers. At the end of December 2021 it had 78,540 self-built cabinets with the majority in Beijing, Shanghai, and the Greater Bay area.