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Nasdaq BABA Alibaba

Headed Toward Earnings, Alibaba Seeing Success

5 years 2 months ago

Ecommerce may be slowing in comparison to the last few quarters' extreme growth, but that does not mean the companies which focus on it are any less successful. When it releases its earnings results on Tuesday, August 3rd, the Alibaba Group (BABA) is expected to report successful margins across multiple sectors. Ecommerce, physical retail, and cloud computing services are all anticipated to drive growth. (See Alibaba stock charts on TipRanks) 

Providing a breakdown of the company’s quarterly progress is Eddie Leung of Bank of America, who explained that he expects revenue growth to be up 37% year-over-year, although this number is significantly lower than last quarter’s 64%. The “deceleration” in ecommerce, and the rippling effect of Tiktok leaving Alibaba Cloud services, are catalyzing this shift in trend.  

Leung reiterated a Buy rating on the stock, and declared a price target of $285. This suggests a possible 12-month upside of 45.4% from Wednesday’s closing price of $196.01.  

The four-star analyst wrote that although he anticipates –9% in EBITDA for BABA, its international business may have increased 42% year-over-year. Domestically, the ecommerce giant has been successful in driving demand for its physical retail locations.  

Alibaba has plans to continue opening physical retail spaces such as its Hema and Sun Art shops, as well as “newer initiatives such as Lazada, Cainiao, Cloud, eCommerce broadcasting, Taobao Deals, local services, and omni-channel commerce.” 

On TipRanks, BABA has an analyst rating consensus of Strong Buy, based on 22 Buy and 2 Hold ratings, and 1 Sell rating. The average Alibaba price target is $285.83, representing a potential 12-month upside of 45.82%.  

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. 

TipRanks

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