What’s In The Cards For Alibaba Group Holding Ltd (BABA) Ahead Of Earnings?

With Alibaba Group Holding Ltd (NYSE:BABA) preparing to release its quarterly results on August 17, RBC Capital’s top analyst Mark Mahaney weighs in with his prediction. Mahaney is forecasting revenue of RMB 45.8 billion, slightly below consensus of RMB 47.6 billion, and Adjusted EPS of 6.15 RMB, slightly below Street at 6.21.

Mahaney wrote, “Fundamental trends remain impressive – particularly premium growth rates (46% Y/Y) in Core Commerce as brands/ merchants ramp advertising spending on BABA’s massive platform. Further, the Cloud Computing segment continues to demonstrate increasing scale (nearly 1MM customers) and hyper-growth (103% Y/Y) while approaching breakeven. BABA continues demonstrating high levels of profitability (~60% Adj EBITA margins in Core Commerce). These trends are impressive and appear sustainable. We continue to view BABA as a Premium-Growth/Premium-Profit Asset.”

As such, Mahaney reiterates a Buy rating on Alibaba shares with a price target of $160, which represents a slight upside potential from current levels.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a yearly average return of 23.1% and a 74% success rate. Mahaney has a 36.5% average return when recommending BABA, and is ranked #7 out of 4618 analysts.

Out of the 27 analysts polled in the past 12 months, 24 rate Alibaba Group stock a Buy, while 3 rate the stock a Hold. With a downside potential of 5%, the stock’s consensus target price stands at $147.38.


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