In a research report released Tuesday, RBC Capital analyst Mark Mahaney reiterated an Outperform rating on shares of Alibaba Group Holding Ltd (NYSE:BABA), and raised the price target to $95 (from $80), after the Chinese e-commerce giant blew away expectations for its fiscal second quarter earnings, posting revenue and EPS of 22.2B RMB and 3.63 RMB, topping consensus’ estimates of 21.3B RMB and 3.43 RMB, respectively.
Mahaney commented, “We are more Bullish, at the margin. China Online Retail– like Global Online Retail, is rapidly going Mobile, and Alibaba has reached a Mobile Monetization inflection point. We believe this means BABA will be able to sustain premium growth rates in its key Retail segment (80% of rev) for the foreseeable future. BABA also continues to demonstrate very high levels of profitability– 50% EBITDA margins and $2.1B in FCF during the qtr. The share buyback was an unexpected surprise. We continue to view BABA as a Premium-Growth & PremiumProfit Asset, with a very reasonable valuation. We also view this as a company with a very effective management team and a sound long-term strategy. Finally, we see BABA as having significant option value in terms of non-retail revenue streams in China, Int’l expansion & a series of major strategic investments.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a total average return of 21.2% and a 64.6% success rate. Mahaney has a -9.9% average return when recommending BABA, and is ranked #5 out of 3802 analysts.
Out of the 34 analysts polled by TipRanks, 32 rate Alibaba Group stock a Buy, while 2 rate the stock a Hold. With a return potential of 21.1%, the stock’s consensus target price stands at $96.20.