RBC Capital analyst Mark Mahaney came out this evening with a research report on Alibaba Group Holding Limited (NYSE:BABA), after the Chinese e-commerce giant reported fiscal first-quarter results which were well below expectations. The analyst reduced the price target to $91 (from $105), while maintaining an Outperform rating on Alibaba stock.
Mahaney commented: “We are less Bullish, at the margin. Relatively significant deceleration in GMV, Revenue, Active Buyers is negative. Several factors at play– 1x events (e.g. Feb suspension of Online Lottery), possible macro softness, Large Numbers Law, and possible market share losses. Not much can be done about macro– BABA is a significant play on Chinese Consumer Demand. If one is Bearish here, it is hard to be Bullish on BABA near-term. Market share issues are harder to ascertain. If one is Bearish here, it is hard to be Bullish on BABA long-term.”
To the company’s credit, the analyst believes that Mobile Monetization improvements are significant, given this is clearly a key Consumer Demand trend. And growth, while decelerating, is robust. “We view this as a very effective management team with a sound strategy. And we see BABA as having significant option value in non-retail revenue streams in China, int’l expansion, and a series of major strategic investments.”, the analyst noted.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a total average return of 23.3% and a 63.4% success rate. Mahaney has a -15.8% average return when recommending BABA, and is ranked #10 out of 3731 analysts.
Out of the 31 analysts polled by TipRanks, 29 rate Alibaba Group stock a Buy, while 2 rate the stock a Hold. With a return potential of 46.1%, the stock’s consensus target price stands at $107.21.