Alibaba Group Holding Ltd (NYSE:BABA) reported another strong set of headline earnings, with results well above consensus expectations, including accelerating revenue growth, driven by ongoing strength in core commerce and continued diversification, with management also raising its FY17 revenue guidance as a result of the recently announced Cainiao consolidation.
Specifically, revenue in the fiscal second quarter, ending September 30, rose 61% to $8.285 billion, from $5.142 billion in the same period a year earlier, topping the $7.78 billion expected on average among analysts. In addition, the company posted adjusted earnings of $1.29 cents per share, beating consensus estimates of $1.04.
Mahaney commented, “BABA’s consistent, premium organic growth rates (57% Y/Y Core Commerce) are indicative of the platform’s strength and scale as brands/merchants ramp advertise spending. Further, Cloud continues to demonstrate increasing hyper-growth (99% Y/Y) while approaching profitability. Our basic thesis on BABA is threefold- 1). BABA is a great play on the dramatic secular growth that is China (China per capita GDP growth faster than U.S. and still 1/7th the size); 2) BABA is a great play on the dramatic secular growth that is the Internet; & 3) Management’s long-term focus and excellent execution arguably makes BABA the single best play on points 1 & 2.”
Alibaba has one of the best ratings by the Street. TipRanks reveals that BABA has a Strong Buy analyst consensus rating with 19 back-to-back buy ratings in the last three months. Meanwhile the average analyst price target of $204.71 suggests the stock still has upside potential of just over 10% from the current share price for the next 12 months.
Alibaba through its subsidiaries, operates as an online and mobile commerce company in the People’s Republic of China and internationally. The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others.