RBC Capital Sets Expectations on Alibaba Group Holding Ltd (BABA), Facebook Inc (FB) and Amazon.com, Inc. (AMZN)

Analyst Mark Mahaney of RBC Capital rates stocks in the Internet sector and is one of the top 10 analysts rated on TipRanks. Today, Mahaney came out with a few expectations on the Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA), Social media giant Facebook Inc (NASDAQ:FB) and Online retail giant Amazon.com, Inc. (NASDAQ:AMZN), ahead of upcoming earnings releases. 

Alibaba Group Holding Ltd

With Alibaba preparing to release fiscal second-quarter earnings, likely in early November, Mark Mahaney reiterated an Outperform rating on the stockwith a price target of $80, which implies an upside of 14% from current levels.

Mahaney observed, “We are forecasting September Quarter revenue of 21.1B RMB, modestly below consensus at 21.4B RMB. Our projections for EBITDA of 10.1B RMB (48% Margin) and Adjusted EPS of 3.22 RMB are also below Street estimates of 10.6B RMB (49% Margin) and 3.43 RMB, respectively. Based on intra-quarter data points and our model sensitivity work, we believe Street September Quarter estimates are reasonable, although given the macro uncertainty our visibility is admittedly low.”

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 22.2% and a 63.8% success rate. Mahaney has a -21.3% average return when recommending BABA, and is ranked #6 out of 3775 analysts.

Out of the 33 analysts polled by TipRanks, 31 rate Alibaba stock a Buy, while 2 rate the stock a Hold. With a return potential of 40.1%, the stock’s consensus target price stands at $98.35.

Facebook Inc

While Facebook is expected to report third-quarter results in late October, Mahaney reiterated an Outperform rating on the stock, with a price target of $105, which represents a potential upside of 13% from where the stock is currently trading.

Mahaney noted, “For Q3:15, we are expecting Revenue and Non-GAAP EPS of $4.34B and $0.52, respectively, and close to Consensus at $4.37B and $0.52. Our EBITDA estimate of $2.59B is a bit below Street at $2.72B. Note that our estimates imply 35% Y/Y Revenue and 20% Y/Y Non-GAAP EPS growth. Based on intraquarter data points, channel checks, and our model sensitivity work, we view current Street September quarter estimates as ballpark reasonable. In terms of guidance, we expect Facebook to reiterate its ‘15 opex growth guidance of 50–55% Y/Y.”

According to TipRanks.com, Mahaney has has a 47.4% average return when recommending FB.

Amazon.com, Inc.

Finally, RBC Capital’s Mark Mahaney weighed in today with his forecast on Amazon, as the company will report third-quarter results on October 22nd. According to TipRanks, Mahaney has a 33.8% average return when recommending AMZN.

Mahaney wrote, “We expect $24.7B in revenue, $555MM in pro forma operating income, and a GAAP EPS loss of $0.18 for the September quarter. Our revenue estimate is slightly below consensus of $24.9B, but slightly above the midpoint of company guidance, and our GAAP EPS estimate is lower than the consensus estimate of ($0.14). Based on intra-quarter data points, our channel checks, and our model sensitivity work, we believe Street estimates for the quarter are reasonable, with a modestly positive upside bias. In terms of Q4 guidance, we view current Street December quarter topline estimates as bracketable, but Street assumptions of approximately 5.2% CSOI margins seem aggressive, although to the extent any margin outlook “miss” is due to International investments, that is less detrimental to the stock, we believe.”

The analyst reiterated an Outperform rating on Amazonwith a price target of $705, which implies an upside of 29% from current levels.

Out of the 43 analysts polled by TipRanks, 37 rate Amazon stock a Buy, while 6 rate the stock a Hold. With a return potential of 9%, the stock’s consensus target price stands at $593.80.

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