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

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

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%

Shares of RERE stock opened at $4.09 on Friday. ATRenew has a 52 week low of $3.50 and a 52 week high of $6.47. The stock has a market capitalization of $897.35 million, a PE ratio of 16.36 and a beta of 0.31. The firm has a 50 day moving average of $4.09 and a two-hundred day moving average of $4.69.

Analyst Ratings Changes

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

Institutional Trading of ATRenew

Several hedge funds have recently modified their holdings of the stock. Squarepoint Ops LLC boosted its stake in shares of ATRenew by 29.4% in the 4th quarter. Squarepoint Ops LLC now owns 38,701 shares of the company’s stock valued at $205,000 after buying an additional 8,785 shares during the period. Van ECK Associates Corp raised its holdings in ATRenew by 10.3% in the fourth quarter. Van ECK Associates Corp now owns 19,794 shares of the company’s stock valued at $105,000 after acquiring an additional 1,855 shares in the last quarter. Prelude Capital Management LLC purchased a new position in ATRenew in the third quarter worth approximately $113,000. Two Sigma Investments LP acquired a new position in ATRenew during the 3rd quarter worth approximately $201,000. Finally, Caxton Associates LLP acquired a new stake in ATRenew in the first quarter valued at $114,000. 19.29% of the stock is currently owned by institutional investors and hedge funds.

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.