Alibaba Stock ( NYSE:BABA )
Alibaba ( NYSE:BABA ) announced impressive earnings for the December 2022 quarter, driving up the price of the stock by as much as 8% in pre-market trading. Notably, Alibaba delivered a massive earnings beat, reporting net income for the period of 46.82 billion yuan as opposed to the expected 34.02 billion yuan (also, net income is up approximately 69% as compared to the same period in 2021). This was done against the backdrop of China’s COVID reopening trade, combined with continued OPEX discipline.
I revise my EPS projections for Alibaba through 2025 in anticipation of a rapid economic recovery in China, and I now arrive at a fair implied price of $138.65 per share. I reiterate a rating of “Buy”.
For comparison, the S&P 500 has lost roughly 7% over the past year, while Alibaba stock has fallen about 16%.
December Quarter 2022
Alibaba’s Q3 FY 2023 results were robust, outperforming analyst consensus projections in terms of both revenue and earnings. The Chinese e-commerce behemoth made sales of roughly 247.8 billion yuan from September to the end of December, compared to $242.6 billion yuan for the same period last year (2% year over year growth), and compared to $245.2 billion yuan expected by experts (according to data collected by Bloomberg)
Alibaba’s operational income, which measures profitability, increased by 396% from the previous year to 35 billion yuan. Diluted earnings per share increased by 76%, from $1.24 in Q3 2021 to $2.24 in Q3 2022, above analyst expectations by nearly 40 cents.
Revenue from Alibaba’s main profit center, “China commerce,” which also includes the well-known online...
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