Market Overview

A Deeper Dive Into Alibaba's Earnings

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Following its first earnings announcement as a public company, shares of Alibaba Group Holding Ltd (NYSE: BABA) were trading higher on Tuesday.

While earnings met expectations and revenues exceeded, a deeper dive into the Alibaba earnings numbers can reveal some pertinent metrics and comparatives.

Key metrics:

  • Margins did slip from 54.5 percent to 50.5 percent, although it still greatly outpaces, Inc.'s margins of 1 percent. The lower margins can be attributable to recent acquisitions, marketing and investments in new initiatives.
  • Gross Merchandise Volume rose nearly 50 percent. Alibaba now has a bigger market cap than Wal-Mart, $258 billion versus $248 billion.
  • Mobile revenue reached $600 million, a tenfold increase from a year ago. Mobile sales now account for close to 22 percent of all sales for Alibaba, with a 217 million monthly active users.
  • Reported numbers were lower due to increased stock based compensation, which may be mostly due to the recent IPO. Stock-based compensation rose almost 2.5 times versus last year, accounting for nearly 18 percent of revenue, with the $490 million in compensation.
  • While Alibaba shares trade at a rich 48 times earnings, that is still far from the valuation attached to competitor Amazon, trading at nearly 250 times earnings.

Shares of Alibaba were trading higher by 3.5 percent at $105.36.

Posted-In: Earnings News Intraday Update


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