Back to top

Bull of the Day: Alibaba Holding Group (BABA)

Read MoreHide Full Article

E-commerce is one of the hottest business segments in the world, and China’s biggest player is our Zacks Bull of the Day, Alibaba Holding Group (BABA - Free Report) .  In their most recent reported quarter, the company saw sales of $5.605 billion, which was an increase of +60% year over year.  And this amazing sales growth is expected to continue to expand for the foreseeable future.

This Zacks Ranked #1 (Strong Buy) operates online and mobile marketplaces in retail and wholesale trade, as well as cloud computing and other services. It provides technology and services to enable consumers, merchants, and other participants to conduct commerce in its ecosystem. The Company operates Taobao Marketplace, an online shopping destination; Tmall, a third-party platform for brands and retailers; Juhuasuan, a group buying marketplace;, an online business-to-business marketplace;, an online wholesale marketplace; and AliExpress, a consumer marketplace. Alibaba Group Holding Limited is headquartered in Hangzhou, the People's Republic of China.

Recent Announcements

During Alibaba’s recent Investors Day, Chief Financial Officer Maggie Wu stated that the company expects sales to rise between 45% to 49% during fiscal year 2018 (ending in March of 2019).  This was well above the previous expectation of +35% sales growth.  This would suggest that BABA is now expecting sales of $34.3 billion for the fiscal year.  Outside of their online shopping, their Alipay (digital payment division), and the Alicloud (cloud computing business) segments are expected to be positive growth drivers going forward.  Lastly, the company currently has 454 million annual active buyers, an increase of 11% from the previous year.  

Price and Earnings Consensus

As you can see in the graph below, the stock has had a strong 2017, and the recent increased revenue growth expectations has caused the stock price and future earnings estimates to skyrocket.

Alibaba Group Holding Limited Price and Consensus

Alibaba Group Holding Limited Price and Consensus | Alibaba Group Holding Limited Quote

Increasing Future Earnings Estimates

Over the past 60 days earnings estimates for Q1 18, Q2 18, FY 18 and FY 19; Q1 18 improved from $0.64 to $0.71, Q2 18 rose from $0.66 to $0.76, FY 18 jumped up from $3.18 to $3.66, and FY 19 was lifted from $4.16 to $5.04.

Bottom Line

Alibaba continues to cement itself as the dominate e-commerce company in China, and with their expansion into other segments like digital payments, and cloud computing the company is increasing their footprint in the digital marketplace.

Looking for Ideas with Even Greater Upside?

Most of Zacks’ investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Alibaba Group Holding Limited (BABA) - free report >>

More from Zacks Bull of the Day

You May Like