Chagee Went Up On Buy Ratings, But I'm Still Watching For Spills

2025-06-11 02:20:24 ET

When I wrote about Chagee Holdings (CHA) two weeks ago, I had a feeling its Q1 earnings would be impressive, as is often the case with newly IPO’d companies. They’re in the early growth stage, expanding aggressively, especially with fresh IPO funding. Double-digit growth rates, or even triple-digit sometimes, are pretty normal at this point. Still, in my previous story, I mentioned I wasn’t fully convinced. And sure enough, that’s exactly what played out. The first earnings report was undeniably strong, yet the stock dropped nearly 10% on the earnings day, closing at $28.01 per share, with the P/E ratio slipping toward 13X–14X....

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