Shares of Alibaba Group Holding Ltd
The results came amid an exciting earnings season. Here are some key analyst takeaways.
- Mizuho Securities analyst James Lee maintained a Buy rating, while reducing the price target from $95 to $92.
- Truist analyst Youssef Squali reiterated a Buy rating, while cutting the price target from $113 to $110.
- Benchmark analyst Fawne Jiang reaffirmed a Buy rating and price target of $118.
The company's consolidated EBITA declined on a year-on-year basis mainly due to higher investments in international businesses and Cainiao, the analyst stated. He reduced the consolidated EBITDA estimate for fiscal 2025 by 7% to 195 billion RMB to reflect the investments.
Truist Securities: Alibaba's quarterly results reflected "good operational execution against an improving macro with a return to double-digit growth in GMV and orders at TTG (Taobao and Tmall Group)," Squali said.
China Commerce Retail, which accounts for around 40% of the company's revenues, recorded 3% year-on-year growth, driven by 5% CMR (advertising and commissions revenues) growth, he added.
The Cloud business could record double-digit growth in the back half of fiscal 2025, the analyst stated. "That said, FY25 remains an investment year which should keep margins in check NT," he further wrote.
Benchmark: Alibaba reported 7% year-on-year revenue growth, representing a "solid" beat, while profits came in lower than expected due to investments, Jiang said. "Double-digit y/y growth on F4Q GMV demonstrates early signs of a market share stabilization," he added.
"The company is committed to invest to revitalize its growth in core businesses - TTG, Cloud and AIDC," the analyst stated. "With growth/user experience as a strategic priority, we acknowledge margin uncertainties in the coming quarters."
BABA Price Action: Shares of Alibaba Group Holding had risen by 1.26% to $80.51 at the time of publication on Wednesday.