Why Luckin Coffee (LKNCY) Stock Is Rallying Today

Luckin Coffee (LKNCY) is surging 10% after the company reported that its revenue had jumped 32.7% last quarter versus the same period a year earlier.

Luckin owns, operates and franchises coffee stores in China.

A Look at Luckin’s Q4 Results

The company’s revenue surged 32.7% in Q4 compared with the same period a year earlier to $1.32 billion. Also importantly, the number of its average monthly transacting customers soared 24.5% year-over-year to 77.8 million. Moreover, its operating income jumped 367.8% YOY to $136.3 million.

A close up of a barista pouring freshly made coffee to a happy customer in a cafe.

On the negative side, the same-store sales of its self-operated stores sank 3.4% YOY. However, that represented a marked rebound compared to the 13.1% YOY same-store sales decline that LKNCY reported for Q3.

Luckin’s Comments

“We delivered solid fourth quarter results, with same-store sales growth for self-operated stores notably improving to negative 3.4% from negative 13.1% in the prior quarter. More encouragingly, this metric turned positive in December 2024,” said CEO Dr. Jinyi Guo in a statement.

“Looking ahead, we are strategically positioned to capitalize on the growth opportunities in China’s thriving coffee market, bolstered by our unparalleled scale and powerful supply chain, ” the CEO added.

The Recent Price Action of LKNCY Stock

In the last month, Luckin has gained 20%, while it has advanced 40% in the last three months.

While we acknowledge the potential of LKNCY, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LKNCY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.