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Market Overview

Earnings Outlook for Alibaba Group Holding

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On Thursday, May 13, Alibaba Group Holding (NYSE:BABA) will release its latest earnings report. Benzinga's report can help you figure out the ins and outs of the earnings release.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Sell-side analysts expect Alibaba Group Holding's EPS to be near $1.79 on sales of $28.11 billion. In the same quarter last year, Alibaba Group Holding reported earnings per share of $1.3 on revenue of $16.14 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release.
When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Thursday, earnings would be up 37.69%. Sales would be have grown 74.12% from the same quarter last year. Alibaba Group Holding's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2021 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 3.25 2.11 1.99 0.87
EPS Actual 3.38 2.65 2.10 1.30
Revenue Estimate 33.35 B 23.17 B 21.34 B 15.20 B
Revenue Actual 33.88 B 22.84 B 21.76 B 16.14 B

eps graph

Stock Performance

For a full 12 months, the return has risen by 10.98%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Alibaba Group Holding is scheduled to hold the call at 07:30:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings