Alibaba (BABA) has 666 million monthly active users in China. That alone is double the population of the United States. You could say there are likely enough singles to pair up with every unmarried person across the 50. Alibaba’s Singles Day had record spending of $30.8 billion, beating out online sales for Black Friday and Cyber Monday all together. It was bigger than Prime Day. The Chinese anti-Valentines Day celebrates singles while encouraging consumers to spoil themselves. The company saw 27% growth from last year’s Singles Day. The marketer holiday began on 11/11 ten years ago.
Two top analysts including SunTrust’s Youssef Squali and Baird’s Colin Sebastian comment on 11/11, but after looking at the numbers, Squali is more confident in the stock than Sebastian.
“Alibaba’s report of 27% y/y increase in GMV to $30.8B (213.5B RMB) as the rising middle class in and around China more than offset the macro headwinds. Historically, we note that Singles Day GMV growth has an R squared of .78 relative to BABA’s annual GMV growth rate, and that (unfortunately) BABA stopped reporting GMV on a quarterly basis,” Squali said.
Squali maintains a Buy rating on BABA with a price target of $180, which implies nearly 26% upside from current levels.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Youssef Squali has a yearly average return of 18.8% and a 65% success rate. Squali has a 14% average return when recommending BABA, and is ranked #69 out of 4,887 analysts.
Sebastian is not buying it as much as Squali is. He reiterates an Outperform rating with a price target of $178, but says BABA isn’t what it used to be.
Like Squali, Sebastian too is considered a 5-star analyst. Sebastian has a yearly average return of 21.7% and a 67% success rate. Sebastian has a 23.6% average return when recommending BABA, and is ranked #31 out of 4,887 analysts.
“Alibaba reported ~27% Y/Y “Singles Day” GMV growth (+22% in USD), slightly below our expectations (+30-40%), and a deceleration from last year’s 39% growth (2016 was +32%) as China e-commerce hits some “speed bumps” related to macro induced factors, in addition to tougher growth comp. For perspective, the $31B GMV still represents ~5x the online sales volume in the U.S. on Cyber Monday, and is more than 30% of eBay’s annual GMV,” Sebastian said.
Sebastian might be the only one noticing those speed bumps he referred to. TipRanks surveyed 24 analysts about BABA in the last three months and not one is bearish or even sidelined. The consensus shows an upside of 48%, with a price target of $209.39. (See BABA’s price targets and analyst ratings on TipRanks)