RBC Capital analyst Mark Mahaney weighed in with a few insights on Alibaba Group (NYSE:BABA), as the company is scheduled to report its quarterly earnings results on Thursday (1/29) before the market opens. According to Mahaney, the key items to focus on are: 1) Margin Trends. 2) China Retail Desktop & Mobile Trends. 3) Taobao & Tmall Marketplace Trends. The analyst rates the stock an Outperform with a $130 price target. 

Mahaney noted, “We are forecasting December quarter revenue of 25.8B RMB vs. consensus at 27.5B RMB. Our projection for EBITDA of 13.1B RMB (51% margin) is modestly below the Street at 14.4B RMB (52% margin), and our Adjusted EPS estimate of 4.37 RMB is slightly below the consensus estimate of 4.64 RMB. We note that this will be Alibaba’s second quarter reporting as a public company.” 

The analyst added, “In terms of the stock call, we are positive on BABA’s total addressable market, business model, management team & competitive moats (our 4M structure), and we view current valuation as reasonable. We also see BABA’s 37.5% Alipay stake as providing potentially material option value.”

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People’s Republic of China and internationally.