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Alibaba (BABA) Stock Dips Ahead of Earnings: What to Watch
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Alibaba (BABA - Free Report) saw its stock price slip marginally during regular trading hours Wednesday as part of a nearly 10% decline over the last three months. BABA’s dip signals that investors are skeptical about the Chinese e-commerce powerhouse. So let’s see what they should really expect from Alibaba’s quarterly results, which are due out before the opening bell Thursday.
Alibaba is one of the world’s largest online retailers, often considered the Amazon (AMZN - Free Report) of China. The firm operates three main sites: Taobao, Tmall, and Alibaba.com. Similar to Amazon, Alibaba is also a cloud computing firm, having grabbed 4% of the cloud market last quarter, which placed the firm far behind Amazon and Microsoft (MSFT - Free Report) , but close to IBM’s (IBM - Free Report) 8% and Google’s (GOOGL - Free Report) 6%, according to Synergy Research Group.
All of this sounds good so far, but some investors and analysts are worried that Alibaba might be negatively impacted by the ongoing trade dispute between the world’s two largest economies. Yet, others have said these trade-related fears won’t impact Alibaba or JD.com (JD - Free Report) in the near-term.
Alibaba's June Quarter
Alibaba’s quarterly revenues are projected to soar 65.5% to hit $12.25 billion, based on our current Zacks Consensus Estimate. Meanwhile, BABA’s adjusted quarterly earnings are projected to pop by roughly 10.3% to reach $1.29 per share. Yet, we still need to know how likely it is that Alibaba tops our quarterly earnings estimate.
Luckily, we can turn to our exclusive Earnings ESP figure to help us find out. Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Alibaba’s quarterly EPS projection has sunk by $0.15 over the duration of the quarter. Plus, the company currently sports an earnings ESP of -5.84% and a Zacks Rank #4 (Sell). Therefore, our model suggests that Alibaba could fall short of our quarterly earnings estimate. Plus, BABA has missed our quarterly earnings estimates in four out of the last six quarters, including the trailing two periods.
Alibaba is scheduled to release its June quarter financial results before the market opens on Thursday, August 23.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Alibaba (BABA) Stock Dips Ahead of Earnings: What to Watch
Alibaba (BABA - Free Report) saw its stock price slip marginally during regular trading hours Wednesday as part of a nearly 10% decline over the last three months. BABA’s dip signals that investors are skeptical about the Chinese e-commerce powerhouse. So let’s see what they should really expect from Alibaba’s quarterly results, which are due out before the opening bell Thursday.
Alibaba is one of the world’s largest online retailers, often considered the Amazon (AMZN - Free Report) of China. The firm operates three main sites: Taobao, Tmall, and Alibaba.com. Similar to Amazon, Alibaba is also a cloud computing firm, having grabbed 4% of the cloud market last quarter, which placed the firm far behind Amazon and Microsoft (MSFT - Free Report) , but close to IBM’s (IBM - Free Report) 8% and Google’s (GOOGL - Free Report) 6%, according to Synergy Research Group.
All of this sounds good so far, but some investors and analysts are worried that Alibaba might be negatively impacted by the ongoing trade dispute between the world’s two largest economies. Yet, others have said these trade-related fears won’t impact Alibaba or JD.com (JD - Free Report) in the near-term.
Alibaba's June Quarter
Alibaba’s quarterly revenues are projected to soar 65.5% to hit $12.25 billion, based on our current Zacks Consensus Estimate. Meanwhile, BABA’s adjusted quarterly earnings are projected to pop by roughly 10.3% to reach $1.29 per share. Yet, we still need to know how likely it is that Alibaba tops our quarterly earnings estimate.
Luckily, we can turn to our exclusive Earnings ESP figure to help us find out. Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Alibaba’s quarterly EPS projection has sunk by $0.15 over the duration of the quarter. Plus, the company currently sports an earnings ESP of -5.84% and a Zacks Rank #4 (Sell). Therefore, our model suggests that Alibaba could fall short of our quarterly earnings estimate. Plus, BABA has missed our quarterly earnings estimates in four out of the last six quarters, including the trailing two periods.
Alibaba is scheduled to release its June quarter financial results before the market opens on Thursday, August 23.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>