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Falling Earnings Estimates Signal Weakness Ahead for 21Vianet Group (VNET)

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is 21Vianet Group, Inc. ( VNET ), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #5 (Strong Sell) further confirms weakness in VNET.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 30 days, compared to no upward revision, with estimates widening from a loss of 6 cents per share a month ago to its current level of a loss of 28 cents per share.

Also, for the current quarter, 21Vianet Group has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 5 cents a share from earnings of 1 cent per share over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.5% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don't have a long time horizon to wait.

If you are still interested in the Internet Services industry, you may instead consider a better-ranked stock - Google Inc. ( GOOGL ). The stock currently holds a Zacks Rank #2 (Buy) and may be better selection at this time.

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21VIANET GP-ADR (VNET): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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