Skip to main content

Market Overview

What To Look For When Alibaba Reports Q2 Earnings

Share:
What To Look For When Alibaba Reports Q2 Earnings

Stifel’s Scott Devitt expects Alibaba Group Holding Ltd (NYSE: BABA) to report its revenue and adjusted EBITDA slightly above the consensus expectations when the company reports its Q2 2017 results on Wednesday.

Devitt maintained a Buy rating on the company, with a price target of $125.

Expectations Of A Beat

“We expect continued strength in the core commerce and cloud businesses to drive top-line growth and narrowing losses in the digital media business to partially offset some margin contraction from ongoing investments,” the analyst mentioned.

Devitt believes investors are likely to be focused on customer engagement and user monetization across the core commerce platform, given that Alibaba doesn't provide GMV on a quarterly basis.

“We continue to support management’s long-term vision and believe that current investments will strengthen Alibaba’s position in both the global eCommerce and digital media ecosystems,” the analyst went on to say.

The company was able to meaningfully beat the EPS expectations in the previous quarter, while expectations for Q2 have been lowered by a penny over the past month.

What Q2 Would Look Like

Devitt believes margin contraction has been slowing and estimates Q2 revenue at $5.17 billion, representing 54.9 percent growth and above the consensus forecast of $5 billion.

China commerce revenue growth is expected at 42 percent year-on-year, driven by China online retail sales growth of 29.9 percent, according to reports by the National Bureau of Statistics of China.

According to a report on Yahoo Finance, Alibaba is expected to have benefited from the stabilizing economic growth in China, while retail sales are likely to have received a 10-11 percent boost over the last three months.

Cloud revenue growth momentum is likely to have continued, despite difficult compares.

Latest Ratings for BABA

DateFirmActionFromTo
Apr 2021Raymond JamesMaintainsStrong Buy
Apr 2021KeybancMaintainsOverweight
Apr 2021CitigroupMaintainsBuy

View More Analyst Ratings for BABA
View the Latest Analyst Ratings

 

Related Articles (BABA)

View Comments and Join the Discussion!

Posted-In: Scott Devitt StifelAnalyst Color Previews Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
QSRNorthcoast ResearchInitiates Coverage On
DQGLJ ResearchInitiates Coverage On22.1
TCMaxim GroupDowngrades
GLNGB of A SecuritiesDowngrades
LMNXPiper SandlerDowngrades37.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com