Qudian Inc (NYSE: QD) is making its way to the top in the market this morning, trading on gains of more than 8% early on. The gains come following an announcement made by the company late Friday, suggesting that 2019 revenues are going to be quite a bit better than expected.
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QD Stock Climbs On Improved Revenue Expectations
In a press release issued late Friday, Qudian said that it is expecting stronger 2019 revenues than previously announced. The company said that the update came as a result of its latest operational outlook, makret conditions, and expectations of the relevant regulatory environment in the near future.
Based on these factors, QD said that it expects for 2019 revenues to be above RMB4.5 billion. That’s a stark increase from the guidance the company announced on December 13, 2018, suggesting that revenue for the year would be above RMB3.5 billion.
In a statement, Mr. Min Luo, Founder, Chairman and CEO at QD, had the following to offer:
We are pleased to announce upwardly adjusted non-GAAP net income guidance for the full year based on encouraging trends in our business. Thanks to strong momentum in our open platform initiative, Qudian is generating a higher level of no-risk, high margin incremental profits than we had anticipated.
Additionally, given our sufficient funding and strong user demand, growth of our loan book is well ahead of our previously set targets, giving us strong confidence that we will meet our revised guidance. With the right growth strategy in place we are excited about Qudian’s ability to deliver value for our shareholders.
Why Investors Are So Excited
Guidance isn’t a picture of exactly what to expect. However, when companies issue guidance, there’s quite a bit of research that goes into it, suggesting that revenue will come near or above the announced expectations.
With that said, investors make investments for one reason. They want to see growth! Considering that the guidance announced in December already suggested solid growth, the new guidance is even more exciting. After all, new guidance suggests that QD is expecting for revenue to be 28% higher than already exciting expectations.
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Final Thoughts
Qudian is setting the bar high for 2019. In my experience, companies don’t generally put this kind of pressure on themselves to produce unless they are confident that they will be able to hit the mark. As such, the rest of 2019 will likely be incredibly exciting times for the company.
What Do You Think?
Where do you think QD stock is headed moving forward? Join the discussion in the comments below!
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