Cantor Fitzgerald analyst Youssef Squali weighed in today with his prediction on Alibaba Group Holding Ltd (NYSE:BABA), as the company is set to announce its fiscal fourth quarter earnings results on Thursday, May 7 before market open. The analyst expects BABA to report strong earnings results, powered by solid growth in core China retail marketplaces.
Squali wrote, “We expect revenue to come in line with FactSet consensus of $2,744M (we’re virtually in line with Street expectations at $2,715M). We expect $0.46 in adjusted EPS and $1,539M in EBITDA vs. Street consensus of $0.44/$1,426M. We expect $97.13B (+40% Y/Y) in GMV on China retail marketplaces, across both Tmall and TaoBao, driven by strong active buyer growth (+~4% Y/Y).”
The analyst also highlighted the key topics for discussion as follows: 1) clarity from management on the controversial topic of counterfeit products and fake transactions on BABA’s marketplaces as well as fictitious transactions, 2) update on consumer demand trends in light of China’s slowing GDP growth, 3) progress on Tmall Global and the offering’s traction to-date with both consumers and large brands, 4) mgt’s strategy on addressing the opportunity in e-commerce outside of China, both in emerging as well as developed markets, and 5) initiatives targeted at increasing mobile monetization and users’ engagement with the platform.
Squali reiterated a Buy rating on with a price target of $100, which represents a potential upside of 23% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Youssef Squali has a total average return of 22.7% and a 66.5% success rate. Squali has a -18.7% average return when recommending BABA, and is ranked #11 out of 3590 analysts.