Alibaba Gets Several Price-Target Hikes As Quarterly Results Outperform
China e-commerce leader Alibaba (BABA) scored several price-target hikes Friday, following its quarterly report on Thursday that beat expectations as it raised fourth-quarter guidance.
XAutoplay: On | OffBefore the market open Thursday, Alibaba reported revenue of $8.285 billion for its fiscal second quarter, up 61% from the year-ago period and maintaining a string of double-digit growth per quarter going back more than four years. Adjusted earnings rose 63% to $1.29 cents per share, the sixth straight quarter of double-digit growth.
Alibaba shares have more than doubled this year and currently trade near its record high.
Needham analyst Laura Martin raised her price target on Alibaba to 215 from 190 and maintained a buy rating. Martin said Alibaba is creating “a significant runway for growth” with its various businesses. This includes Alibaba’s efforts to blend its online assets with physical stores, and its expansion of digital media and entertainment.
“We believe the company’s aggressive investments in logistics, content and new retail are necessary steps to unlock these potentials, and we are not concerned about the near-term impact on profitability,” Martin wrote in a note to clients.
Baird analyst Colin Sebastian raised his price target on Alibaba to 210 from 190 and maintained an outperform rating.
“We continue to view ongoing investments in cloud computing, international retail, (logistics) and digital media/entertainment as key drivers of long-term growth and market share gains as Alibaba is a driving force for the expansion of e-commerce in China,” Sebastian said in his note.
Alibaba has been experimenting with new forms of retail and customer engagement that lean heavily on interactivity, technology and consumer analytics. Examples include Alibaba’s expansion into supermarkets with an 18-store chain called Hema. Along with groceries, Alibaba has expanded into multiple facets of a digital economy, including digital entertainment, financial services and cloud computing.
IBD’S TAKE: Alibaba is one of eight stocks currently on the exclusive IBD Leaderboard list of top-performing stocks. Alibaba is near the high end of a 5% buy range from a 177.10 ascending-base buy point after a volatile, earnings-related trading session Thursday. Try this simple routine when considering how to invest in stocks.
KeyBanc Capital Markets analyst Hans Chung raised his price target on Alibaba to 210 from 182 and maintained an overweight rating.
“Alibaba continues to deliver superb growth in core commerce, driven by strong user growth and improving personalization,” Chung wrote in a note.
Alibaba shares were down 0.9%, near 183.10, during morning trading in the stock market today.
Alibaba rival JD.com (JD) reports quarterly results on Nov. 13. Another internet giant that competes against Alibaba and JD.com, Tencent Holdings (TCEHY), reports quarterly results before the market open Nov. 15. JD.com is also a leader in China e-commerce but with a different business model than Alibaba. Tencent is China’s market leader in gaming and messaging.
Alibaba, JD.com and Tencent are among the best Chinese stocks to buy and watch.
Alibaba on Tuesday kicked off its “11.11 Global Shopping Festival,” culminating on Nov. 11, which is Alibaba’s biggest sales day of the year. The Alibaba festival towers over the U.S. shopping events Black Friday and Cyber Monday. Alibaba said the event last year generated more than $17.8 billion in gross merchandise volume.