Alibaba Beats Revenue Estimates with 7% YoY Growth, Strong Buy Rating Maintained

Bank of America's Eddie Leung raised their price target on Alibaba (NYSE: BABA) by 4% from $99 to $103 on 2024/05/16. The analyst maintained their Strong Buy rating on the stock.

Alibaba, the e-commerce giant, reported its Q4 and FY 2024 earnings on May 14th, 2024. The results showed a consolidated revenue growth of 7% year-over-year, led by a 4% increase in Taobao Tmall Group. These figures were in line with both the Bank of America (BofA) and Street consensus estimates, according to the analyst.

Leung, in their report to investors, highlighted that management's positive outlook on Taobao Tmall's Gross Merchandise Volume (GMV) resulted in an increase in revenue estimates for FY 2025 and 2026 by 0% to 2%. Additionally, they raised the FY 2026 Net Profit estimate by 3%.

In Q4 2024, Alibaba reported earnings per share (EPS) of $0.18 (RMB1.27), a 5% decrease compared to Q4 2023's EPS of RMB1.34. The company's revenue for the same period reached $30.73 billion (RMB221.87 billion), indicating a 7% year-on-year growth. Alibaba also announced the repurchase of 524 million shares (65 million ADSs) for a total of US$4.8 billion.

For the full fiscal year 2024, Alibaba's EPS was $1.08 (RMB7.78), a 14% increase compared to the previous year. The company's revenue for FY 2024 reached $130.35 billion (RMB941.17 billion), reflecting an 8% year-on-year growth. Notably, Alibaba did not provide any financial guidance in its press release or earnings presentation.

CEO Eddie Wu expressed satisfaction with the results, stating, "This quarter's results demonstrate that our strategies are working and we are returning to growth." He emphasized the double-digit year-on-year GMV growth in China and international commerce businesses, attributing it to their focus on enhancing the customer experience. Wu also expressed excitement about the accelerated growth of customers and cloud computing revenues related to Alibaba's AI products. He further stated that the company would remain focused on strategic priorities and capturing future growth opportunities.

CFO Toby Xu echoed Wu's positive sentiment, stating, "Alibaba Group delivered a strong quarter with revenue growth of 7% year-on-year." Xu emphasized the early results from increased investment in strategic business priorities and expressed confidence in the company's outlook. He reiterated their commitment to returning value to shareholders and mentioned the repurchase of $12.5 billion worth of shares during FY 2024, along with a board-approved $4 billion dividend for the same fiscal year.

In addition to Bank of America's Eddie Leung, Barclays' Jiong Shao also provided an update on Alibaba on May 16th, 2024. Shao lowered their price target by -1.8% from $109 to $107 but maintained their Strong Buy rating on the stock.

Notably, all top-rated analysts currently rate Alibaba as either Strong Buy or Buy, with no analysts considering it a Hold or recommending selling the stock.

The consensus forecast among analysts suggests that Alibaba's upcoming year will deliver earnings per share (EPS) of $6.15. If the analysts' predictions hold true, Alibaba's next yearly EPS will see a significant increase of 40.6% year-over-year.

Since Alibaba's latest quarterly report on May 14th, 2024, the stock price has increased by 9%. However, on a year-over-year basis, the stock is down 2.3%. During the same period, Alibaba has underperformed the S&P 500, which has seen a decline of 28.9%.

Bank of America analyst Eddie Leung, who raised the price target on Alibaba, is ranked in the bottom 13% of Wall Street analysts according to WallStreetZen. With an average return of -3.2% and a win rate of 38.2%, Leung specializes in the Consumer Cyclical and Industrials sectors, among others.

Alibaba Group Holding Limited is a prominent player in e-commerce, retail, internet, and technology. The company offers consumer-to-consumer (C2C), business-to-consumer (B2C), and business-to-business (B2B) sales services through web portals. It also provides electronic payment services, shopping search engines, and cloud computing services. Alibaba hosts the world's largest B2B (Alibaba.com), C2C (Taobao), and B2C (Tmall) marketplaces. Founded in 1999 and headquartered in Hangzhou, China, Alibaba continues to dominate the global e-commerce landscape.

Want to get in touch? Email us at news@wallstreetzen.com.

WallStreetZen and Don Francis do not hold any positions in the companies mentioned in this article. The information and statistics provided herein are presented for general informational purposes only and may not be accurate, complete, or up-to-date. It should not be interpreted as a recommendation to buy or sell any stocks and should not be solely relied upon for making investment decisions. It does not take into account your financial situation or risk profile. All investors should conduct their own investment due diligence before buying a stock. WallStreetZen expressly disclaims any liability for the accuracy, reliability, or completeness of the analysts' information, price targets, ratings, or opinions.