Earnings season is in full swing and these three e-commerce and tech giants are set to release reports for the past quarter. Here’s what to expect from Alibaba Group Holding Ltd (NYSE:BABA), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT).
Alibaba Group Holding Ltd
Alibaba is expected to post its Q3:16 results on Thursday, January 28 before market open. Analyst expect the company to post revenues of 35.3 billion RMB and earnings per share of 6.09 RMB for the quarter, compared to last year’s revenues of 26.2 billion RMB and earnings of 5.05 RMB per share.
For this quarter, all eyes will be on the company’s Singles Day sales, as the company reported record numbers for this November 11 shopping event. Other focuses include the company-owned Tmall and Toaboa, which are ranked #1 and #2 in e-commerce sites by Chinese consumers; mobile segment GMV as consumers shift to mobile shopping; and Global Online Retail. Analysts expect to see revenue growth in the upcoming report and are generally bullish regarding management and the company’s overall strategy.
On January 14, 2016, analyst Mark Mahaney of RBC Capital reiterated an Outperform rating on the company with an $85 price target. The analyst commented on the upcoming earnings, stating, “We believe…BABA can sustain premium growth rates in its key Retail segment (80% of revenue) for the foreseeable future. BABA also continues to demonstrate very high levels of profitability.” He is also optimistic on the company’s “effective management team and a sound long-term strategy,” thanks to Alibaba’s “non-retail revenue streams in China, Int’l expansion & a series of major strategic investments.”
According to TipRanks’ statistics, out of the 22 analysts who have rated the company in the past 3 months, 21 gave a Buy rating while 1 remains on the sidelines. The average 12-month price target for the stock is $95.15, marking a 35% increase from where shares last closed.
Amazon will release its Q4:15 earnings results on Thursday, January 28 after market close. Analysts are expecting revenues of $35.98 billion and earnings of $1.63 per share, compared to revenues of $29.33 billion and earnings of $0.45 per share for the same quarter of last year.
The company posted record holiday sales with a 40% y/y increase in items shipped. Amazon also added 3 million Prime subscribers while reporting record sales for its own devices such as the Kindle and Fire. Analysts expect to see revenue growth in this quarterly report, as last month’s Channel Advisor data indicated the company dominated e-commerce in the U.S., with analysts expressing optimism on the company’s internet of things (IoT) segment AWS.
On January 22, 2016, analyst Youssef Squali of Cantor reiterated a Buy rating on the company with a $750 price target, expressing positive sentiment on upcoming earnings. He states, “We expect Amazon to be one of the biggest beneficiaries of e-commerce growth this past holiday season”
According to TipRanks’ statistics, out of the 20 analysts who have rated the company in the last 3 months, 18 gave Amazon a Buy rating while 2 remain on the sidelines. The average 12-month price target between these 20 analysts is $783.72, marking a 31% upside from where shares last closed.
Microsoft will release second quarter earnings for fiscal year 2016 on Thursday, January 28 after market close. Analysts estimate the company will post EPS of $0.71 on revenue of $25.25 billion. This marks relatively flat year-over-year growth because in the same quarter of last year, the company posted EPS of $0.71 on revenue of $26.5 billion.
Analysts will be checking on Microsoft’s progress as it transitions into a cloud-based company. Consequently, analysts are keeping a close eye on Azure, Microsoft’s cloud platform. Many agree that Azure and Amazon’s AWS are dominating the cloud market. However, analysts worry that the recent success of Azure will detract from Microsoft’s other segments.
Despite the fall in PCs as consumers shift to mobile, analysts will be looking for increasing PC revenue, specifically Microsoft’s Surface tablets. Furthermore, Windows 10 is now operating on more than 200 million units. This version has allowed the company to save face after Windows 8 disappointed users. Since Windows 10 is automatically integrated with Bing, Microsoft’s search engine, analysts will be looking for growth in this segment as well.
According to TipRanks, 13 analysts are bullish on Microsoft while 1 remains on the sidelines. The average 12-month price target between these 14 analysts is $62.54, marking a 20% potential upside from where shares last closed.