Alibaba (BABA) earnings: negative sentiment, despite strong growth

1:22 pm ET, 31 Oct 2018

Alibaba Group Holding Limited (BABA) shares are trading at $140, up 3%. The company is announcing its quarterly earnings results on Friday before the market opens.  What's driving Alibaba stock price?  What's BABA stock price forecast?

Alibaba Group operates an online commerce company in China and globally. The stock fell 24% in the past year.  At its recent Investor Day, the company tried to reassure investors of the long-term growth story.

Investors are showing interest in the company because of strong revenue growth.  On the other hand, some bearish investors worry about Alibaba's falling margins, resulting from its investments in New Retail strategy and Ele.me.  Last quarter’s revenue rose 68% to $12.23 billion and earnings per share came at $1.22 compared to $1.17 for the same period last year.

Second-quarter results for the fiscal year 2019  will be released before market open on November 02, 2018.  Analysts expect the company to earn $1.12 per share on revenue of $12.6 billion. The company beat analysts’ estimates in the previous two quarters.

What is the sentiment towards the BABA stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative. 

Over the last month, Alibaba Group Holding Limited (BABA) returned -13.62%.

Alibaba Group Holding Limited (BABA) average analyst price target ($233.78) is 63.63% above its current price ($142.87).

For the latest price and information on Alibaba Group Holding Limited, please visit Finstead and search for "BABA price" or "BABA news".

JD.com (JD) stock: is the dip worth buying?

1:27 pm ET, 11 Sep 2018

JD.com, Inc. (JD) shares are trading at $27.00, up 2%. What's driving JD stock price? What's JD stock price forecast?

JD.com's  CEO was arrested on a rape accusation and was released earlier this month. But the damage has already been done for the stock. It has fallen around 20% since the news first broke.  There are more questions about JD to be answered as the company’s CEO Richard Liu has around 16% of the company’s stock and 80% of the voting shares, which bars the board from making any decision in his absence.

The stock has been on a downturn since the company is not able to generate a profit and because of the sexual allegations against the CEO. On the other hand, some experts are betting the stock to be a fundamental buy after the recent drop.

JD.com continues to grow in China’s online retail industry and the top line is expected to grow around 10% in the next three years. The company is also investing in its logistics network which was lagging when compared to Alibaba.

What is the sentiment towards the JD stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative. 

JD.com, Inc. (JD) forward P/E ratio is 34.78, and it’s high compared to its industry peers’ P/E ratio.

JD.com, Inc. (JD) average analyst price target ($41.20) is 52.93% above its current price ($26.94).

For the latest price and information on JD.com, Inc., please visit Finstead and search for "JD price" or "JD news".

Alibaba (BABA) stock: massive growth is possible

5:00 pm ET, 22 Aug 2018

Alibaba Group Holding Limited (BABA) shares are trading at $178, up 0.12%.  The company will report fiscal first-quarter earnings before the US market opens on Thursday.  What's driving BABA stock price? What's BABA stock price forecast?

Management is calling for 60% revenue growth in FY19--and this is well ahead of market expectations of 40% growth.  60% growth (50% excluding the consolidation of food delivery platform Ele.me and Cainiao) further validates the underpinning network effect for the company.  Analysts are now closely watching the retailer's aggressive expansion into new categories (fashion, CPG) and verticals beyond e-commerce, such as local services and entertainment.

Investors are also paying a lot of attention to AliCloud as the primary growth driver. Bolstered by new enterprise partnerships and engagement among existing customers, another triple-digit growth year is achievable for AliCloud, with preliminary estimates calling for revenue to double in FY19.

What is traders' sentiment towards the BABA stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative.

Over the last month, the Alibaba Group (BABA) returned -10.32%.

Alibaba Group Holding Limited (BABA) average analyst price target ($235.43).

For the latest price and information on Alibaba Group Holding Limited, please visit Finstead and search for "BABA price" or "BABA news".

YY stock: a great buy or a risky value proposition?

2:57 pm ET, 17 Aug 2018

YY Inc. (YY) shares are trading at 74.09, up 2.50%. What's driving YY stock price? What's YY stock price forecast?

YY is a social media and internet streaming company based in the People's Republic of China. The company has an appealing quality and growth outlook, given that access to internet services in China has improved in the recent years and it is still on the upside.  

The company produced solid Q2 numbers; however, it issued low Q3 guidance, and as a result, the shares tanked.  Management justified this with a one-time event, the World Cup, which timing-wise coincided with the peak live-streaming hours on YY.com.

In the last 4 years, YY has increased total revenue three times, from $593 million in fiscal 2014 to $1.78 billion in fiscal 2017.  The company's EPS increased by 29% year-on-year. 

However, the YY stock sentiment seems to be overwhelmingly negative these days.  Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is negative;
  • The mid-term sentiment (3-6 months) is negative;
  • The long-term sentiment (9-12 months) is negative. 

Over the last month, YY Inc. (YY) returned -23.15%.

YY Inc. (YY) average analyst price target ($154.49) is 104.24% above its current price ($75.64).

For the latest price and information on YY Inc., please visit Finstead and search for "YY price" or "YY news".

Is Baozun (BZUN) overbought at this point?

12:14 pm ET, 13 Aug 2018


Baozun Inc. (BZUN) shares are trading at 51.64, down -7%. There are no apparent news driving the price drop; however, the company is set to report earnings tomorrow.  What's BZUN stock price forecast, and what are investors speculating?

Baozun offers e-commerce solutions to its business clients.   The company's stock price tripled in the last year.  Baozun’s business has gone from a low-margin distribution model to a higher margin service-fee model in the last year. 

Baozun partners with non-Chinese multinationals to enable them to effectively brand and sell their products in China.  Baozun boasts a total of 156 brand partners, including big names such as Phillips, Nike, and Microsoft.

Chinese internet stocks such as Baidu, Alibaba, JD.Com, Netease, and Tencent have all fallen over the last couple of months.  Baidu is down almost 20% month-to-month.  Up until recently, Baozun has held up better than the rest of Chinese companies trading on US stock exchanges.  

Baozun has averaged sales growth of 28% per year over the last three years; it also grew 25% in the most recent quarter. Analysts expect the company’s sales to grow by 27% in 2018 and by 33% in 2019.   The company's profit margin is 7.7%, while the operating margin is 6.3%.

What is the sentiment towards the BZUN stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is neutral.

Over the last month, Baozun Inc. (BZUN) returned -4.69%.

Baozun Inc. (BZUN) forward P/E ratio is 30.13, and it’s high compared to its industry peers’ P/E ratios.

Baozun Inc. (BZUN) average analyst price target ($56.67) is 1.78% above its current price ($55.68).

For the latest price and information on Baozun Inc., please visit Finstead and search for "BZUN price" or "BZUN news".

Baidu (BIDU) earnings preview: aggressively expanding into non-search areas

12:47 pm ET, 27 Jul 2018

Baidu, Inc. (BIDU) is expected to report earnings on July 31 after market close.  The report will be for the fiscal quarter ending June 2018.  shares are trading at 264.54, up 1.8%.

What are BIDU earnings expectations?  What should investors know about Baidu prior to the earnings?

Baidu has been evolving from a mobile-first to an artificial-intelligence-first company. The company has been facing competition from other Internet companies, particularly Alibaba and Tencent. In the near term, margins will remain under pressure due to aggressive content spending and talent acquisition costs for AI personnel.

The departure of Qi Lu, the chief operating officer and group president of Baidu, will not change the strategic direction of the company: refocusing on search, feeds, and artificial intelligence and reducing noncore operations such as online-to-offline services. Analysts do not think the improvement in Baidu's performance was solely due to Lu's leadership. 

In 2017, total revenue was up 20% year over year versus 6% in 2016, while operating profit was up 56% versus negative 14% in 2016. The strong recovery in 2017 was at least partly due to the low base in 2016 when the medical scandal revolving around Wei Zexi in the second quarter of 2016 and subsequent tightened regulations led to reduced revenue. 

Sitting on a cash pile of over CNY 100 billion, Baidu has ample dry powder to invest in technology, particularly in artificial intelligence, as well as merger and acquisition opportunities.

Baidu Inc. has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 94 cents ($2.36 actuals vs. $1.42 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 170 cents ($3.89 actuals vs. $2.19 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 24 cents ($2.29 actuals vs. $2.05 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 87 cents ($2.60 actuals vs. $1.73 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 11% year-over-year to $2.63, while revenue is expected to grow 30% year-over-year to $4.01 billion.  

Over the last month, Baidu, Inc. (BIDU) returned +2.14%.

Baidu, Inc. (BIDU) average analyst price target ($292.64) is 10.62% above its current price ($264.54).

For the latest price and information on Baidu, Inc., please visit Finstead and search for "BIDU price" or "BIDU news".

Baidu (BIDU): the bull case

1:37 am ET, 30 Apr 2018

Baidu (NASDAQ: BIDU) is up over 5% in today's trading.  The stock has recovered from recent lows, which occurred because of tariff concerns spurred by recent political rhetoric between the US and China. What is the BIDU stock forecast?   

Baidu, the largest Internet search engine in China, has transformed from a mobile-centric to an AI-focused (artificial intelligence) company.

The primary competition that Baidu faces is from Alibaba and Tencent. We expect the margins to be thin not only because of aggressive R&D spend in the AI space, but also content spend. 

Baidu’s reputation and revenues from search were tarnished in the Wei Zexi incident (2016).  However, Chinese authorities put new regulations for online advertising in place, which clearly defined paid search results as advertising.  In 2016, Baidu’s active marketing customers decreased by 6% and its search revenue declined by 0.5%. 

However, its advertising revenue recovered in 2017, when online marketing revenue grew 13% year over year.

Baidu’s online video platform IQiyi has been a key growth driver in the past three years. Revenue increased 55% last year, but this division generated a significant operating loss. Baidu filed for an IPO for iQiyi, raising $1.5 billion. 

Baidu has a potential to achieve a breakthrough in AI-based apps or services, including autonomous driving.  Baidu views itself as a tech company and has been actively investing in AI for many years.

Over the last year, BIDU returned +34.17%. This return is higher than Internet Information Providers sector (6.59%), Technology industry (8.05%), and S&P 500 (11.64%) returns.


Per Finstead Research, Baidu's average analyst price target is $266.10 (visit Finstead and type "BIDU price target").

To check the latest news and stock analysis on Baidu, visit Finstead and type "BIDU news" or "BIDU buy or sell".  

Alibaba's Phenomenal Retail Platform

4:28 pm ET, 05 Dec 2017

Alibaba's retail platform

Similar to last quarter, it was Alibaba's core retail platform that stood out during its second-quarter update.  China retail revenue accelerated sharply (up 64%, versus 57% last quarter and 41% the quarter before that), which is viewed as a culmination of recent mobile, personalized data, and category expansion investments.

There are two important points you should understand:

1.  Alibaba's network effect is increasing, as the company matters more and more to buyers and sellers.  Retail revenue per active buyer (up 36% year over year per active user) and an increasing average unit price per click demonstrate this point.  

2.  Alibaba's China retail platform offers multiple growth levers, including Loyalty Membership, short video brand content, and new retail formats  (e.g., Hema, Intime, and Tmall-branded convenience stores). Alibaba's China retail segment is expected to deliver 30% average annual growth over the next five years.

Coupled with strong cloud (up 99%) and international retail (up 115%) revenue growth, Alibaba may come in at or slightly above its updated 2018 revenue growth target of 49%-53%.  The second-quarter growth trends validate Alibaba's investments in core retail offerings.

Over the last year, BABA has returned +85.10%. This return is higher than Services Sector (10.57%), Specialty Retail Industry (-5.81%), S&P 500 (19.72%) returns.

Based on Finstead analysis, the average analyst price target for Alibaba is 29% above its current price (search "BABA upside" on Finbot).  

Alibaba Group Holding Limited (BABA) Stock Guide

Updated at: 6:58 pm ET, 16 Sep 2020

Before we start: if you're looking for BABA stock price, you can quickly find it out by visiting Finny and typing "BABA quote". If you're looking for a quick scoop on BABA stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "BABA". You'll get all this info in one place. Or you can just type "BABA news" to get the latest stock news.

Looking to buy or sell Alibaba Group Holding Limited (BABA)? Interested in getting the full scoop on BABA, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this BABA stock guide, we'll address key questions about BABA, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are BABA earnings?
2. What is BABA stock forecast (i.e., prediction)?
3. BABA buy or sell? What is BABA Finny Score?
4. What are the reasons to buy BABA? Why should I buy BABA stock?
5. What are the reasons to sell BABA? Why should I sell BABA stock?
6. What are BABA key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are BABA earnings?

BABA trailing 12-month earnings per share (EPS) is $3.50.

Analyst Predictions

2. What is BABA stock forecast (i.e., prediction)?

Based on BABA analyst price targets, BABA stock forecast is $301.60 (for a year from now). That means the average analyst price target for BABA stock is $301.60. The prediction is based on 48 analyst estimates.

The low price target for BABA is $220.81, while the high price target is $402.65.

BABA analyst rating is Buy.

Analysis

3. BABA buy or sell? What is BABA Finny Score?

#{finnyScore:50}Our quantitative analysis shows 3 reasons to buy and 3 reasons to sell BABA, resulting in Finny Score of 50.

4. What are the reasons to buy BABA? Why should I buy BABA stock?

Here are the reasons to buy BABA stock:

  • Alibaba serves about 80% of the Chinese e-Commerce market where population density is very high. E-Commerce Index reveals which developing markets hold the most potential for online growth, and China is now leading the race in terms of maximizing the potential of the Internet compared with the West. The low-cost, widely available telecommunication infrastructure in China has increased the popularity of online shopping.
  • Alibaba’s Gross Merchandise Value (GMV) is very solid. GMV is defined as the total value of transactions made across the company’s marketplace. It is a very important metric for e-Commerce companies.
  • Alibaba continues to witness increasing monetization rates (i.e., the amount Alibaba earns from the sale of goods on its platforms is going up). The company’s focus on foreign brands and high-quality merchants on its platforms continue to increase the online marketing inventory on both mobile and the PC, thus further improving the monetization rate.
  • Alibaba has been supplementing organizational growth with strategic acquisitions. The company spent billions on acquisitions last year in varying sectors ranging from film production to taxi-booking services to professional soccer.
  • We expect Alibaba’s payment platform will continue to grow, driven by the move toward online shopping all over the world. Its online payment platform includes a lot of services like bank transfers, Alipay account transfers, payment of credit card and utility bills at no extra cost, mobile top-up with credit, bank balance check, bus ticket purchases, online checkout on many sites and in-store payments. Moreover, Alibaba has made full use of the exponential increase in smartphones and tablets for making payments.
  • Alibaba is also taking steps to strengthen its position outside China. The company has been looking to international markets to expand its business and its current strategy is to generate earnings through investment in the U.S.
  • Increased competition and market saturation has forced Alibaba to move beyond hawking goods online. The company is trying to build its business as an ecosystem of retail, cloud and artificial intelligence. Having been around long enough to establish logistical relationships through Cainiao, payments processing through Ant Financial and a solid core commerce model, Alibaba has been guzzling data that it is in an increasingly better position to use for improving customer experience and feeding its AI initiatives.
  • Alibaba is working on the development of what it calls “New Retail” to bridge the gap between online and offline shopping using its big data capacity. It expects that the system will offer brick-and-mortar retailers new ways to evolve across marketing, inventory and distribution networks. These look promising and will not only reshape the retail landscape but also help Alibaba fend off competition.
  • BABA quarterly revenue growth was 33.80%, higher than the industry and sector average revenue growth (0.81% and 0.78%, respectively). See BABA revenue growth chart.
  • BABA Price/Book ratio is 12.02, which is low compared to its industry peers’ P/B ratios. See BABA forward Price/Book ratio chart.
  • BABA average analyst rating is Buy. See BABA analyst rating chart.

5. What are the reasons to sell BABA? Why should I sell BABA stock?

Let's look at the reasons to sell BABA stock (i.e., the bear case):

  • Alibaba's corporate structure entails certain risks because of the Chinese laws. According to those, it is illegal for a foreigner to own stocks in any Chinese Internet company, which implies that a foreign investor cannot be a real stockholder in Alibaba. Therefore, all foreign investors who bought Alibaba shares on the NYSE actually purchased stocks of the holding company called Alibaba Group Holding Ltd registered in the Cayman Islands and not that of the actual Alibaba.
  • Alibaba completed a number of acquisitions over the past year and while these acquisitions are augmenting its key capabilities and enabling it to expand both in China and internationally, integration risks remain. Moreover, the acquired businesses bring additional costs that are likely to add to its costs in the near term.
  • Alibaba is already facing tough competition from the likes of Tencent Holdings. As the company continues to expand into the U.S., it will increasingly be up against well established competitors such as eBay and Amazon. Also, Alibaba competes with PayPal on the mobile payment system front.
  • BABA profitability is declining. The YoY profit margin change was -2.32 percentage points. See BABA profitability chart.
  • BABA PEG ratio (P/E adjusted for growth) is 63.41, which is high compared to its industry peers’ PEG ratios. See BABA PEG chart.
  • BABA short interest (days to cover the shorts) ratio is 2.56. The stock garners more short interest than the average industry, sector or S&P 500 stock. See BABA short interest ratio chart.

Key Stats

6. What are BABA key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for BABA:

Metrics BABA
Price $271.11
Average Price Target / Upside $301.60 / 11.25%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Specialty Retail
Sector Consumer Cyclical
Number of Employees 101,550
Market Cap $819.98B
Forward P/E Ratio 25.73
Price/Book Ratio N/A
Revenue (TTM) N/A
YoY Quarterly Revenue Growth 33.80%
Profit Margin 32.00%

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