ATRenew (NYSE:RERE) Releases Quarterly Earnings Results, Beats Estimates By $0.01 EPS

ATRenew (NYSE:RERE) issued its quarterly earnings results on Thursday. The company reported $0.10 EPS for the quarter, beating analysts’ consensus estimates of $0.09 by $0.01, FiscalAI reports. The company had revenue of $972.82 million for the quarter, compared to analyst estimates of $930.34 million. ATRenew had a return on equity of 11.48% and a net margin of 1.90%.

Here are the key takeaways from ATRenew’s conference call:

• Q2 revenue and profitability reached record highs: revenue rose 32.4% year over year to CNY 6.61 billion, while non-GAAP operating profit increased 70.1% to CNY 210 million and margin expanded 69 basis points to 3.1%.
• The higher-margin 1P business continued to drive growth, with product revenue up 35.9%, 1P refurbished-product revenue up 87.8%, and 1P2C retail reaching 48.8% of product revenue versus 34.4% a year earlier. Management said improved retail mix lifted 1P gross margin to 15.7% from 13.2%.
• Net service revenue declined 4.2% year over year to CNY 410 million, mainly because of merchant subsidies, waived or reduced fees during the 618 promotion, and pressure on B2C platform merchant activity. Management expects Paipai’s shift toward 1P retail and 3P consignment to cause some short-term revenue adjustment.
• Recycling demand benefited from trade-in programs and the 618 shopping festival: mobile phone and consumer-electronics recycling value rose 57% during the promotional period, while orders increased 45%. The company also highlighted a 77.3% increase in luxury recycling service revenue and plans to expand themed stores.
• ATRenew launched the overseas B2B marketplace FoneSquare and consumer brand ReRe, targeting expansion from Hong Kong into Dubai and Southeast Asia, but said the initiatives remain in early development. Q3 revenue guidance is CNY 6.34 billion–CNY 6.44 billion, up 23.1%–25.1% year over year, while management did not provide specific full-year guidance.

ATRenew Stock Down 10.9%

NYSE:RERE opened at $4.09 on Friday. ATRenew has a 1-year low of $3.50 and a 1-year high of $6.47. The firm has a market capitalization of $897.35 million, a price-to-earnings ratio of 16.36 and a beta of 0.31. The stock has a fifty day simple moving average of $4.09 and a 200 day simple moving average of $4.69.

Institutional Investors Weigh In On ATRenew

Several hedge funds have recently made changes to their positions in the company. Hsbc Holdings PLC acquired a new position in ATRenew in the 4th quarter worth approximately $67,000. XTX Topco Ltd boosted its position in shares of ATRenew by 1,103.4% in the fourth quarter. XTX Topco Ltd now owns 159,983 shares of the company’s stock worth $848,000 after buying an additional 146,689 shares during the period. Wellington Management Group LLP purchased a new position in shares of ATRenew during the fourth quarter valued at $23,190,000. Engineers Gate Manager LP raised its position in ATRenew by 125.7% during the fourth quarter. Engineers Gate Manager LP now owns 48,445 shares of the company’s stock valued at $257,000 after buying an additional 26,978 shares during the period. Finally, Capitolis Liquid Global Markets LLC purchased a new stake in ATRenew in the 4th quarter worth about $3,903,000. Hedge funds and other institutional investors own 19.29% of the company’s stock.

Wall Street Analyst Weigh In

RERE has been the topic of a number of recent analyst reports. UBS Group initiated coverage on shares of ATRenew in a research report on Tuesday, July 21st. They set a “buy” rating and a $5.50 price target on the stock. Wall Street Zen lowered ATRenew from a “strong-buy” rating to a “buy” rating in a research note on Saturday, July 25th. Weiss Ratings reissued a “hold (c)” rating on shares of ATRenew in a research note on Wednesday, July 29th. Finally, CICC Research started coverage on shares of ATRenew in a research report on Thursday. They issued an “outperform” rating on the stock. Two equities research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company. According to data from MarketBeat, ATRenew has an average rating of “Moderate Buy” and an average price target of $5.50.

About ATRenew

ATRenew Inc, through its subsidiaries, operates pre-owned consumer electronics transactions and services platform in the People's Republic of China. It primarily sells mobile phones, laptops, tablets, drones, digital cameras; and vintage bags, watches, liquor, gold, and various household goods through its online platforms and offline stores, as well as provides services to third-party merchants to sell the products through its platforms. The company was formerly known as AiHuiShou International Co Ltd.