Alibaba Group Holding Ltd (BABA)

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Earnings Preview: Alibaba Group Holding Ltd. (NYSE: BABA)
By: 24/7 Wall St. | November 15, 2022

• Here is a look at four companies on deck to report results before markets open on Thursday.

Alibaba

Over the past 12 months, shares of Alibaba Group Holding Ltd. (NYSE: BABA) have lost about 57% of their value. The stock’s 52-week high rolls off on Wednesday, so the steady decline in Alibaba’s stock should slow down.

There are other bits of good news that could boost the stock’s value in the near term: China has begun relaxing its COVID-19 controls, putting some life back in consumer spending; the government crackdown on big tech firms appears to be at an end; U.S. audits of New York-listed stocks is now complete, and results are pending; and Ant Group has grown its capital base, giving it the ability to expand its consumer lending business.

Of the 44 analysts covering the stock, 39 have Buy or Strong Buy ratings. At a recent share price of around $71.30, the upside potential based on a median price target of $137.00 is about 92%. At the high price target of $218.00, the upside potential is 206%.

For Alibaba’s second quarter of fiscal 2023, analysts are expecting revenue of $29.63 billion, which would be down 3.4% sequentially and 5% lower year over year. Adjusted EPS are expected to come in at $1.64, down 6.3% sequentially and by 5.7% year over year. For the full fiscal year that ends in March, Alibaba is expected to report EPS of $7.26, down 12.6%, on sales of $127.99 billion, down 4.9%.

Alibaba’s stock trades at 9.8 times expected 2023 EPS, 8.4 times estimated 2024 earnings of $8.48 and 7.4 times estimated 2025 earnings of $9.66 per share. The stock’s 52-week trading range is $58.01 to $169.94. Alibaba does not pay a dividend, and total shareholder return for the past year was negative 57.2%.

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