Financial Trading Blog
Stock of the day 09/08/2016 – Alibaba Group Holding Ltd
After a rather hairy start to the year, which saw the stock plunge from $78.50 to $59.27 in the space of 5-ish weeks, and continued accusations that it isn’t interested in curbing counterfeit sellers on its various marketplaces, Alibaba has re-found its groove in the last few months. From that early low Alibaba has climbed all the way back to a current trading price of $85 (IT-Finance.com, 09/08/2016); that’s its best level since the end of 2015, though is around $35 away from the all-time peak of $119 the company struck in the month or so after its US IPO.
(Source: IT-Finance.com 09/08/2016)
Despite fears surrounding the Chinese economic slowdown Alibaba has managed to best expectations in both of its quarterly reports this year. Back in January it revealed a 32% rise in third quarter revenue to $5.2 billion, against the 27% increase forecast, while in May it saw a 39% upturn in Q4 turnover to $3.7 billion. Like many of its US or UK counterparts Alibaba’s mobile presence is also increasingly important, with it accounting for 63% of sales in the fourth quarter.
In terms of Alibaba’s latest results, analysts are expecting the company to post a 47% surge in revenue to $4.5 billion alongside a 7% increase in earnings per share to 63 cents. Investors may be looking for it to beat those estimates, however, given the company’s form in the past 2 quarters.
Alibaba Group Holding Ltd has a consensus rating of ‘Buy’ with an average target price of $95.47.
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