3 Stocks to Watch Ahead of Tomorrow’s Earnings: Alibaba Group Holding Ltd (BABA), Yelp Inc (YELP), Allergan plc Ordinary Shares (AGN)
Alibaba Group Holding Ltd
Chinese companies have had a difficult time this year but Alibaba Group Holding Ltd (NYSE:BABA) has been the exception. Shares of the often called Chinese Amazon are up 25% in 2016 on a string of robust top line growth. The ecommerce giant’s strong market position in China has helped deliver uninterrupted growth in mobile and improving gross merchandise value. Additionally, mobile monetization has started to gain traction with revenue per mobile user growing to $21 in the previous quarter. Baba’s cloud component has far outpaced growth in every other segment of the business. Sales from Aliyun reported a 156% increase in the first quarter and should continue to improve as it increases in scale.
Yelp Inc (NYSE:YELP) shares are trending higher in the past 12 months after a series of better than expected earnings reports. Yelp delivered a strong second quarter on the back of greater cumulative reviews, local advertising accounts and unique downloads. The company is still struggling to turn a profit as more competition floods the market. There are now a handful of major players including Uber, GrubHub, Amazon and even tech giants, Google and Facebook. All these companies have ramped up their efforts to capture a bigger part the market, which means Yelp isn’t likely to turn a profit in the near future.
Allergan plc Ordinary Shares
Expectations for Allergan (NYSE:AGN) upcoming quarter are trending lower leading into the print on increasing competition and the divestiture of its Anda distribution business. Allergan recently sold its generics and Anda distribution business to Teva Pharmaceutical which is expected to hurt second half revenues by nearly $100 million. Analysts at Estimize expect this to look like a 7% decline on the top line compared to the same period last year. An earlier acquisition of the Botox treatment should offset some of these losses while the performance of a handful of new products is still a mystery.