We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alibaba Group Holdings (BABA - Free Report) reported strong December quarter numbers on January 24 with top and bottom line beats and a whopping 54% year-over-year growth in sales.
Wall Street analysts liked that growth and the outlook going forward enough to raise estimates 23% for the current fiscal year (ending in March) from $2.15 to $2.65. And the next fiscal year also moves up 23% from $2.56 to $3.16.
Alibaba CEO Daniel Zhang highlighted "We are driving the age of 'New Retail,' which leverages big data and innovation to provide a seamless online and offline experience for nearly half a billion mobile monthly active users. This retail transformation will make it even easier and more efficient for brands and retailers to engage with these consumers anywhere, anytime."
After the conference call, my colleague Ryan McQueeney explained "Alibaba further detailed its 'New Retail' concept, saying that it will help the company tap into the entirety of China’s $4.8 trillion retail sector by breaking down the distinction between online and offline commerce. To that end, Alibaba has started partnering with several different brick-and-mortar retailers.
Wall Street Goes Gaga Over BABA
For this Bull of the Day, I thought it would be interesting to also hear from the analysts whose upward revisions to growth estimates have once again made the stock a Zacks #1 Rank. Here are 5 viewpoints on the Amazon (AMZN - Free Report) of China...
RBC Capital maintained their Outperform rating on Alibaba and kept their price target of $120 citing strong China retail sales growth and the new Cloud Computing division reaching a $1 billion revenue run rate.
Goldman Sachs analyst Piyush Mubayi raised their FY17-FY19 revenue estimates by 3-4% on better growth outlook for China online advertising and International retail, and raised EPS estimates by 5-7% due to higher operating leverage. The firm reiterated their Conviction List-Buy rating on the stock and moved their price target from $128 to $135.
Deutsche Bank raised its price target from $140 to $148 noting that the company attributed strong results to solid consumer usage, merchant spend, and impressive user growth, with mobile MAU (monthly active users) reaching 493 million, representing 25% growth. Here were some other important comments from their report...
"Online marketing services again expanded robustly, by 47%, mainly driven by paid click growth. Commission revenue reaccelerated to 32% yoy, reflecting Tmall GMV growth recovery. Core e-commerce margin saw continued expansion to 64%, despite investment in globalization, FMCG & rural Taobao.
"The company lifted FY17 full year guide from 48% to 53%. The new guide should be easy to achieve given BABA’s strong momentum. Alibaba's "New Retail" strategy meanwhile seeks to integrate more offline retailers (e.g. Intime) with integrated inventory, membership and services to serve both users and merchants more efficiently. Monetization should thus increase long term."
Morgan Stanley raised its price target on BABA shares from $130 to $140 and maintained their Overweight rating.
Analyst Grace Chen noted "Alibaba raised F17 sales guidance from 48% YoY growth to 53% YoY after the stronger than expected F3Q17 results. It is transforming from an eCommerce to a marketing platform, which enables it to capture more merchant spending, expanding from distribution to marketing services. For F18, the company will focus on globalization, rural China, and cloud/big data to propel growth."
SunTrust analysts discussed 3 key points in their review of the quarter: 1) Core and organic revenue growth accelerated driven by engagement (clicks). FY revenue guidance increased to 53% YoY growth vs. 48% prior. 2) Core EBITA profitability of 64% was inline/better while investments in Lazada, Tmall Supermarket, and "New Retail" continue; and 3) Outlook for improved Cloud and Digital profitability remains positive for FY’18.
The firm reiterated their Buy rating based on strong core growth and profitability, prudent growth investments, and the portfolio of assets. Their $125 2017 price target implies a sub-25X multiple for calendar year 2018 EPS.
As a Zacks Rank #1 Strong Buy, today's Bull of the Day has a short-term 1 to 3-month profit zone. But the Zacks Rank system also leads to long-term investments with double and triple-digit profit potential. Starting today, you can look inside our stocks under $10, home run, and value portfolios, plus more. Want a peek? Click here >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bull of the Day: Alibaba Group (BABA)
Alibaba Group Holdings (BABA - Free Report) reported strong December quarter numbers on January 24 with top and bottom line beats and a whopping 54% year-over-year growth in sales.
Wall Street analysts liked that growth and the outlook going forward enough to raise estimates 23% for the current fiscal year (ending in March) from $2.15 to $2.65. And the next fiscal year also moves up 23% from $2.56 to $3.16.
Alibaba CEO Daniel Zhang highlighted "We are driving the age of 'New Retail,' which leverages big data and innovation to provide a seamless online and offline experience for nearly half a billion mobile monthly active users. This retail transformation will make it even easier and more efficient for brands and retailers to engage with these consumers anywhere, anytime."
After the conference call, my colleague Ryan McQueeney explained "Alibaba further detailed its 'New Retail' concept, saying that it will help the company tap into the entirety of China’s $4.8 trillion retail sector by breaking down the distinction between online and offline commerce. To that end, Alibaba has started partnering with several different brick-and-mortar retailers.
Wall Street Goes Gaga Over BABA
For this Bull of the Day, I thought it would be interesting to also hear from the analysts whose upward revisions to growth estimates have once again made the stock a Zacks #1 Rank. Here are 5 viewpoints on the Amazon (AMZN - Free Report) of China...
RBC Capital maintained their Outperform rating on Alibaba and kept their price target of $120 citing strong China retail sales growth and the new Cloud Computing division reaching a $1 billion revenue run rate.
Goldman Sachs analyst Piyush Mubayi raised their FY17-FY19 revenue estimates by 3-4% on better growth outlook for China online advertising and International retail, and raised EPS estimates by 5-7% due to higher operating leverage. The firm reiterated their Conviction List-Buy rating on the stock and moved their price target from $128 to $135.
Deutsche Bank raised its price target from $140 to $148 noting that the company attributed strong results to solid consumer usage, merchant spend, and impressive user growth, with mobile MAU (monthly active users) reaching 493 million, representing 25% growth. Here were some other important comments from their report...
"Online marketing services again expanded robustly, by 47%, mainly driven by paid click growth. Commission revenue reaccelerated to 32% yoy, reflecting Tmall GMV growth recovery. Core e-commerce margin saw continued expansion to 64%, despite investment in globalization, FMCG & rural Taobao.
"The company lifted FY17 full year guide from 48% to 53%. The new guide should be easy to achieve given BABA’s strong momentum. Alibaba's "New Retail" strategy meanwhile seeks to integrate more offline retailers (e.g. Intime) with integrated inventory, membership and services to serve both users and merchants more efficiently. Monetization should thus increase long term."
Morgan Stanley raised its price target on BABA shares from $130 to $140 and maintained their Overweight rating.
Analyst Grace Chen noted "Alibaba raised F17 sales guidance from 48% YoY growth to 53% YoY after the stronger than expected F3Q17 results. It is transforming from an eCommerce to a marketing platform, which enables it to capture more merchant spending, expanding from distribution to marketing services. For F18, the company will focus on globalization, rural China, and cloud/big data to propel
growth."
SunTrust analysts discussed 3 key points in their review of the quarter: 1) Core and organic revenue growth accelerated driven by engagement (clicks). FY revenue guidance increased to 53% YoY growth vs. 48% prior. 2) Core EBITA profitability of 64% was inline/better while investments in Lazada, Tmall Supermarket, and "New Retail" continue; and 3) Outlook for improved Cloud and Digital profitability remains positive for FY’18.
The firm reiterated their Buy rating based on strong core growth and profitability, prudent growth investments, and the portfolio of assets. Their $125 2017 price target implies a sub-25X multiple for calendar year 2018 EPS.
Disclosure: I own BABA shares for the Zacks TAZR Trader service.
Now see our best long-term trades
As a Zacks Rank #1 Strong Buy, today's Bull of the Day has a short-term 1 to 3-month profit zone. But the Zacks Rank system also leads to long-term investments with double and triple-digit profit potential. Starting today, you can look inside our stocks under $10, home run, and value portfolios, plus more. Want a peek? Click here >>