Dangdang (DANG, Financial) continued its trend of posting consecutive improvements in profitability for the fourth time. The company posted impressive results on the back of efficient operations. The company is seeing healthy improvement in the gross margin. Besides this, Dangdang has a solid balance sheet with no debt, which can help it invest in its business.
Making the right moves
Dangdang's new brand image is expected to attract customers by providing high-quality product. This is expected to grow its customer base by attracting many new and enthusiastic customers. Moreover, Dangdang is seeing strong momentum from its mobile Dangdang and Dangdang ereader app. Besides this, it has also launched many new online shopping channels on Mobile Dangdang which is launched with a prime focus on youths. This will help the company to create an image of a trendy style brand.
To engage more customer stickiness to its online books, Dangdang has introduced a new version of the Dangdang ereader app with new and exciting features. With this move, the company is now seeing strong growth in mobile orders. Further, this momentum is expected to continue in future as well giving bright growth opportunities across mobile Dangdang.
Marketing strategies and more catalysts
Dangdang is also focused on its marketing strategies. It is engaging itself with multiple channels to optimize advertising and promotional initiatives. This will help the company to accelerate the number of active customers and new customers. Besides, Dangdang is also making significant investments in Mobile Dangdang and the company is pleased to see positive results. To stretch its footprints further, Dangdang is strengthening its relationship with mainstream mobile and media partners.
Dangdang is well aware of the shopping trends that it is seeing across its customer base. With the growing need of a diverse and personalized online shopping experience, Dangdang is integrating better shopping experience across the prominent categories to build customer loyalty. It is also working on costs and continues to attract new customers at reasonable pricing, overall enhancing the customer experience.
Dangdang is focusing on new destination categories such as Fashion, apparel, baby and maternity, home and lifestyle. With the robust growth across its mobile platform, it is making ways to integrate its mobile platform to benefit these core businesses on which it is focusing.
Conclusion
Now moving to the fundamentals, it is evident of the trailing P/E of 62.06 that the stock is expensive but the forward P/E of 18.15 shows good growth in the earnings in future. For the next five years, its earnings are growing with a CAGR of 19.80% which is more than the industry average of 15.23%. another exciting fact about the stock is the consecutive improvement in the gross margin in the recently quarter.
Its mobile segment is also seeing good traction in the market and with the further growth in the mobile users, this offering is expected to help the company to a good extent in improving its market share. The near as well as long-term prospects of the company look strong with impressive earnings growth. Investors shouldn’t mind paying a heavy premium for the stock at these valuation levels as the stock definitely got much steam.
