An analyst sees good growth prospects for RLX Technology Inc. (RLX)

RLX Technology Inc. (NYSE: RLX) stock fell -1.33% on Tuesday to $2.23 against a previous-day closing price of $2.26. With 7.9 million shares changed hands, the volume of the stock remained lighter than its average volume of 10.58 million shares. During the session, the Tobacco company that operates in wider Consumer Defensive sector, reached to the highest price of $2.2900 whereas the lowest price it dropped to was $2.2000. The 52-week range on RLX shows that it touched its highest point at $3.06 and its lowest point at $0.90 during that stretch. It currently has a 1-year price target of $4.32.

Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of RLX was down-trending over the past week, with a drop of -5.11%, but this was down by -10.44% over a month. Three-month performance surged to 8.78% while six-month performance rose 26.70%. The stock gained 19.25% in the past year, while it has lost -3.04% so far this year. A look at the trailing 12-month EPS for RLX yields 0.07 with Next year EPS estimates of 0.12.

Float and Shares Shorts:

At present, 1.32 billion RLX shares are outstanding with a float of 723.15 million shares on hand for trading. On Apr 27, 2023, short shares totaled 28.88 million, which was 1.84% higher than short shares on Mar 30, 2023. In addition to Ms. Wang Ying as the firm’s Co-founder, Chairperson of the Board of Directors & CEO, Mr. Jiang Long serves as its Co-founder & Director.

Institutional Ownership:

Through their ownership of 25.09% of RLX’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 5.68% of RLX, in contrast to 28.73% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in RLX with 6.38% of the stake, Goldman Sachs & Co. LLC holds 44,658,333 shares worth 44,658,333. A second-largest stockholder of RLX, The Vanguard Group, Inc., holds 21,428,136 shares, controlling over 3.06% of the firm’s shares. Keystone Investors Pte Ltd. is the third largest shareholder in RLX, holding 20,186,300 shares or 2.89% stake. With a 1.45% stake in RLX, the Vanguard Emerging Markets Stock I is the largest stakeholder. A total of 10,126,454 shares are owned by the mutual fund manager. The Vanguard Total International Stoc, which owns about 1.37% of RLX stock, is the second-largest Mutual Fund holder. It holds 9,549,777 shares valued at 23.49 million. iShares Core MSCI Emerging Market holds 0.68% of the stake in RLX, owning 4,763,679 shares worth 11.72 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, RLX reported revenue of $2.23B and operating income of $446.94M. The EBITDA in the recently reported quarter was $406.31M and diluted EPS was $0.35.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RLX since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With RLX analysts setting a high price target of $57.04 and a low target of $21.94, the average target price over the next 12 months is $34.53. Based on these targets, RLX could surge 2457.85% to reach the target high and rise by 883.86% to reach the target low. Reaching the average price target will result in a growth of 1448.43% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.