The technology sector has a busy week ahead with three blockbuster companies set to report earnings on Tuesday. Don’t miss a beat in earnings from Apple Inc. (NASDAQ:AAPL), Alibaba Group Holding Ltd (NYSE:BABA), and Twitter Inc (NYSE:TWTR).
Apple will release fourth fiscal quarter earnings on Tuesday, October 27 after market close. Analysts expect the tech giant to post earnings per share of $1.88 on revenue of $51.1 billion, marking a potential 21% year-over-year increase.
Analysts will be looking for revenue derived from iPhone 6 and 6 Plus sales as well as updated figures on the Apple Watch. Wary investors are cautious of decelerating Mac sales and Apple’s presence in China. Since China has been Apple’s main fuel for growth, investors will be listening for the impact of the summer slowdown in the Chinese markets.
Although analysts are eager to see impressive figures from the most recent quarter, most are emphasizing guidance for the next quarter, which encompasses the goldmine holiday shopping season. First fiscal quarter revenue estimates range from $70 billion to $88 billion.
According to the 36 analysts polled by TipRanks in the last 3 months, 27 are bullish on Apple, 1 is bearish, and 8 are staying on the sidelines. The average 12-month price target for the stock is $145.45, marking a 22% potential upside from where shares last closed.
Alibaba Group Holding Ltd
Alibaba will announce second quarter fiscal 2016 earnings on Tuesday, October 27 before the market opens. Analysts estimate that the company will post earnings per share of $3.43, which would mark an 185% year-over-year increase, and quarterly revenue of $3.36 billion.
Investors will be watching to see how the Chinese ecommerce giant was impacted by the summer slump that plagued the Chinese market. Analysts note that the Chinese economic slowdown resulted in decelerating growth, which will not bode well for the company. To determine the overall impact of the slowdown, analysts will be looking at the report’s GMV figure, or gross merchandise volume.
Investors will also be looking for an update on Alibaba’s proposal to buy out Youku Tudou, known as “the YouTube of China.” Lastly, Alibaba is expected to summarize sales targets for Singles Day; a Chinese shopping holiday to take place on November 11.
According to the 23 analysts polled by TipRanks in the last 3 months, 21 are bullish on Alibaba while 2 are staying on the sidelines. The average 12-month price target between these 23 analysts is $90.80, marking a 20% potential upside from where shares last closed.
Twitter will release third quarter earnings on Tuesday, October 27 after market close. Analysts expect the company to post earnings per share of $0.05 on revenue of $560 million; a considerable increase from the same quarter of last year in which the company posted $0.01 and $361 million, respectively.
All eyes are on Jack Dorsey; the company’s co-founder and newly permanent CEO. Since he has been at the helm of the company, Dorsey has already laid off 8% of the workforce in an attempt to streamline its engineering department, and gifted one third of his Twitter shares back to the remaining employees. Aside from these public gestures, analysts are more interested in learning what Dorsey will do to combat decelerating user growth; increase the speed of innovation on the platform; and increase sustainable monetizing endeavors.
Advertisers are still becoming comfortable learning the best way to advertise on the platform. Twitter does not have as precise ad-targeting capabilities as Facebook, making it less appealing to advertisers. However, investors are hoping this will change thanks to Twitter’s new Moments feature, which allows users to track local and global stories being covered on Twitter..
According to the 32 analysts polled by TipRanks in the last 3 months, 17 are bullish on Twitter; 2 are bearish; and 13 are neutral. The average 12-month price target for the stock is $40.54, marking a 34% potential upside from where shares last closed.