Earnings Beat: Analysts Weigh In on Alibaba Group Holding Ltd (BABA), LinkedIn Corp (LNKD)

Analysts share bullish insights on Chinese online marketplace Alibaba Group Holding Ltd (NYSE:BABA) and business-oriented social media network LinkedIn Corp (NYSE:LNKD), as Alibaba prepares to release their quarterly earnings this Thursday, while LinkedIn released their company 10Q.

Alibaba Group Holding Ltd

Analyst Mark Mahaney of RBC Capital weighs in on Alibaba ahead of its earnings announcement on May 5th. Mark Mahaney reiterated an Outperform rating and provided a price target of $89.

Mahaney believes the Street March quarter estimates to be “ballpark reasonable” as he forecasts revenue of 23.9 billion RMB, above the consensus of 23.2 billion RMB with EBITDA of 9.6 billion RMB (40% margin), which is below consensus of 11.1 billion RMB (48% margin). Following the intra-quarter management meeting, Mahaney highlighted three thematic takeaways; “Macrular” trends are positive for Alibaba, Advertising revenue and mobile monetization remain growth opportunities, and BABA has a valuable stake in Ant Financial.

A few key items Mahaney highlights are the margin trends. He is looking for gross margins of 63% (down ~200 bps Y/Y) and EBITDA margins of 40% (down ~900 bps Y/Y from 49% in March ’15 Q). Regarding the China retail desktop and mobile trends, Mahaney is looking for mobile segment GMB of 586 B RMB (+93% Y/Y) and desktop revenue of 4.9B RMB (take rate 2.58%).

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark S. Mahaney has a yearly average return of 19% and a 63% success rate. Mahaney is ranked #6 out of 3911 analysts.

Out of the 6 analysts polled by TipRanks (in the past 3 months), 6 analysts rate Alibaba stock a Buy. The stock’s consensus target price is $99.67, marking a potential upside of 31.3%.

LinkedIn Corp

Following the release of LinkedIn’s latest 10Q analyst Youssef Squali of Cantor Fitzgerald reiterated a Buy rating on the stock and maintained his price target of $220.

In light of the report, Squali adjusted FY:16/FY:17 depreciation and amortization expense to $550.6M/$587.9M, from $565.9M/$666.7M, reflecting updates to his gross fixed assets and intangible assets from the 10Q as well as adjustments to the expected life assumptions.

Further, Squali is raising the 2017 NEPS as revenue/EBITDA remains unchanged. The results of the adjustments by Squali provide new FY:16/FY:17 estimates of $3.43/$4.07, up from $3.45/3.18 previously. Lastly, Squali highlights that the biggest risks faced by LinkedIn are a weakening macro environment, reduced engagement with the platform, and increasing competition.

According to TipRanksanalyst Youssef Squali has a yearly average return of 14.2% and a 63% success rate. Squali is ranked #14 out of 3911 analysts.

Out of the 34 analysts polled by TipRanks (in the past 3 months), 18 analysts are Bullish on LinkedIn stock, while 16 remain Neutral.  The stock’s consensus target price is $169.86, marking a potential upside of 35.99%.


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