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4 Questions About Alibaba's Big Q1 Beat

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4 Questions About Alibaba's Big Q1 Beat

Alibaba Group Holding Ltd (NYSE: BABA), China’s e-commerce behemoth, blew away expectations for the first quarter and left analysts wondering just how much sky is the limit.

Alibaba broke out of the gate with a 7-percent spike before settling in at $166.10, up 4.3 percent at last check, after announcing revenues of $7.4 billion for its first quarter. The print prompted UBS analyst Ming Xu to rate the stock as a Buy and set a price target of $175.

Questions About BABA’s Big Beat? Some Answers

The UBS analyst posed some quick questions about Chairman Jack Ma’s juggernaut. (Currency quotes are in the Mandarin renminbi).

1. How did top line results compare vs. UBS and street expectations?

“For FQ1, total revenue came in at Rmb (renminbi) 50.18 billion (vs. our estimate of Rmb 48.06 billion and Street estimate. of Rm 47.68 billion), for growth of 56 percent YoY (vs. UBS est. of 49.5 percent YoY).”

Related Link: Alibaba Spikes 7 Percent After Impressing The Street In Q1 Report

4. How did bottom line results compare vs. UBS & Street expectations?

“Adjusted EBITDA was Rmb 25.12 billion (vs. our estimate of Rmb 21.20 billion and Street of Rmb 21.50 billion) for growth of 68 percent YoY.”

3. What Is front of mind for the call?

  • “Update on consumer sentiment and spending habits in China.”
  • “Thoughts on the incremental revenue opportunity from the new suite of products under Uni Marketing framework.”
  • “Further clarity around Alibaba's online/offline (new retail) strategy including revenue runway expectation.”
  • “Update on active buyer and MAU growth as well as monetisation per user.”
  • “Any update to the 45-49 percent YoY FY18 revenue growth guidance and any qualitative commentary on GMV growth.”
  • “Clarity around the cadence and magnitude of content spend and commentary on core margin stability.”

4. How do we expect investors to respond?

“We expect BABA shares to have a positive reaction to this set of results – despite its +81 percent ytd stock performance, this was a clear beat (across the board) on all metrics that matter to investors.”

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Image Credit: By Thomas LOMBARD, designed by HASSELL (architects)[1] (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Latest Ratings for BABA

DateFirmActionFromTo
Oct 2019MaintainsOverweight
Sep 2019ReiteratesBuy
Aug 2019MaintainsOverweight

View More Analyst Ratings for BABA
View the Latest Analyst Ratings

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