Alibaba Group Holding Ltd (BABA)

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Earnings Preview: Alibaba Group Holding Ltd. (NYSE: BABA)
By: 24/7 Wall St. | May 16, 2023

Alibaba

Over the past 12 months, shares of Alibaba Group Holding Ltd. (NYSE: BABA) traded essentially flat with plenty of big swings. But over the past two years, shares have dropped about 57% of their value. Aside from the country’s strict lockdown rules that were not repealed until early this year, the company managed to get sideways with the Chinese government, and that is never a good thing. The holding company has announced a six-piece split of its individual companies that could unlock some value, along with calling a halt to government fears that the e-commerce giant is getting too big.

Of 46 analysts covering the stock, 43 have ratings of Buy or Strong Buy. The others rate it at Hold. At a recent price of around $88.00 a share, the upside potential based on a median price target of $143.90 is about 73.8%. At the high price target of $217.73, the upside potential is 147.4%.

For Alibaba’s fourth quarter of fiscal 2023, analysts are expecting revenue of $30.05 billion, which would be down 16.3% sequentially and by 6.6% year over year. Adjusted EPS are expected to come in at $1.36, down 51.2% sequentially but 8.8% higher year over year. For the full fiscal year that ended in March, Alibaba is expected to report EPS of $7.61, down 8.40%, on sales of $125.02 billion, down 7.1%.

Alibaba shares trade at 11.6 times expected 2023 EPS, 10.2 times estimated 2024 earnings of $8.63 and 9.0 times estimated 2025 earnings of $9.81 per share. The stock’s 52-week trading range is $58.01 to $125.84. The company does not pay a dividend, and total shareholder return for the past 12 months is 2.10%.

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