BEIJING - As Chinese e-commerce behemoth Alibaba (NYSE:BABA) Group Holding Ltd. gears up for its second-quarter fiscal 2024 earnings report tomorrow, analysts are forecasting an uptick in revenue and earnings per share (EPS), despite the backdrop of China's economic challenges and moderated online demand. A consensus among twenty analysts suggests an EPS of CNY 15.28, marking an increase from the CNY 12.92 per share reported in the same quarter last year.
The anticipated sales growth of 8.35% is projected to yield revenues of CNY 224.48 billion for the quarter. Looking at the broader fiscal year, expectations are set for an EPS of CNY 65.10 and revenues totaling CNY 959.34 billion, indicating a climb from the previous year's figures of an EPS of CNY 54.56 and revenues of CNY 868.69 billion.
Despite recent price target adjustments by some analysts in November due to concerns over China's economic conditions and weak consumer trends, there remains a bullish sentiment around Alibaba's stock. The unanimous Buy recommendations from these analysts reflect a positive outlook, with an average stock price target set at $142.33, suggesting a significant upside potential of 69.70%.
The company's cost reduction efforts and improvements in operational efficiency are expected to contribute to a rise in EPS from $1.77 to $2.10. While Alibaba's e-commerce and cloud businesses navigate macroeconomic uncertainties, they could see a boost from the strength of their advertising business.
Options traders are bracing for a possible earnings move of +/- 5.7%, which would outpace the previous quarter's move of 4.6%. As the market awaits Alibaba's financial disclosures, investors and analysts alike will be closely monitoring the performance indicators that will shed light on the company's trajectory in a challenging economic landscape.
InvestingPro Insights
InvestingPro's real-time data and insights provide a valuable perspective on Alibaba's performance and potential. With a market capitalization of 213.32B USD and a P/E ratio of 18.78, Alibaba's financials reflect its significant presence in the market. The company's revenue over the last twelve months as of Q1 2024 stands at a remarkable 123666.63M USD, with a growth rate of 5.21%. This solid growth is indicative of Alibaba's resilience in a challenging economic climate.
InvestingPro Tips highlight Alibaba's high earnings quality, with free cash flow exceeding net income, and a noteworthy fact that management has been aggressively buying back shares. This suggests confidence in the company's future prospects. Furthermore, Alibaba holds more cash than debt on its balance sheet, an indicator of strong financial health. It's also worth noting that Alibaba is a prominent player in the Broadline Retail industry, which further underscores its market dominance.
For more detailed insights and tips, consider exploring InvestingPro's comprehensive suite of tools and resources. With a total of 10 additional tips available for Alibaba, investors can gain a more nuanced understanding of the company's financial health and future potential.
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