Alibaba Stock FY2024 Q3 Third-party Analysts' Forecast & Preview

Alibaba's stock price has been volatile in 2023 as the company navigates a challenging regulatory environment in China while working to expand its businesses.

The stock jumped in late February after Alibaba reported fiscal third quarter results that beat expectations. Adjusted earnings per share rose 5% to $2.79, exceeding the $2.37 consensus estimate. Revenue fell 6% to $35.9 billion but topped the $35.76 billion forecast. However, the stock gave up gains a day later amid broader market weakness.

Earlier in February, Alibaba's stock initially rose 3% seemingly based on news that the company's research institute was working on a chatbot similar to ChatGPT. But the stock erased those gains as the overall market declined.

In January, Alibaba's stock surged over 16%, breaking out as the Nasdaq and S&P 500 marked follow-through days. But after hitting a peak of $139.24 on January 9, the stock pulled back below its 50-day moving average.

More recently, Alibaba's stock plunged from $101.06 on April 11 to $89.37 on April 12, a drop of 11.69%, after it was reported that Softbank had sold much of its stake in Alibaba. As of October 8, Alibaba's stock price sits at $72.68, down 28.07% year-to-date.

According to Ken Shreve (Twitter: @IBD_KShreve), with the stock below its key moving averages, Alibaba does not give a buy signal at current levels. For the stock to break its downtrend, it would need to move decisively above its 50-day and 200-day moving averages, currently around $92.50-$93.

Source: Alibaba Stock Surges On Hong Kong IPO News (www.investors.com) >>

Part 2：Alibaba FY2024 Q2 Earnings Report Recap

1. Alibaba Key Indicators and Historical Earnings Report

• - Alibaba FY2024 Q2 EPS was $1.48, YOY -235.61%
• - Alibaba PE Ratio today is 18.50 
• - Alibaba FY2024 Q2 Revenue was $30.8B, YOY +5.72% 
• - Alibaba FY2024 Q2 FCF was $6.7B, YOY +1.82%
• - Alibaba FY2024 Q2 Current Ratio was 1.94, YOY +9.85% 
• - Alibaba FY2024 Q2 ROA was 1.54%, YOY -228.46%
• - Alibaba FY2024 Q2 ROE was 2.70%, YOY -225.71%
• - Alibaba FY2024 Q2 Gross Margin was 37.87%, YOY +3.28% 
• - Alibaba FY2024 Q2 Net Margin was 11.88%, YOY -209.51%

For more information, such as definitions and explanations of the above technical terms, please view:

Interpretation of Key Indicators >>

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2. Alibaba FY2024 Q2 Financial Statement Analysis

• Revenue and Profitability

  Alibaba reported revenue of RMB234.16 billion ($32.29 billion) for Q1 FY2024, up 14% year-over-year. This growth was driven by increases in revenue across all major business segments, with particularly strong performance from the Alibaba International Digital Commerce and Local Services groups.

   

  Gross profit margin improved to 39% in Q1 from 37% in the prior year quarter. Income from operations grew 70% to RMB42.49 billion ($5.86 billion), representing an operating margin of 18% compared to 12% in Q1 last year. Net income attributable to ordinary shareholders increased 51% to RMB34.33 billion ($4.74 billion).

   

  On an adjusted non-GAAP basis, which excludes items like share-based compensation, adjusted EBITA grew 32% to RMB45.37 billion ($6.26 billion) while non-GAAP net income increased 48% to RMB44.92 billion ($6.20 billion). These metrics demonstrate Alibaba's ability to grow profits through revenue growth and improved operating efficiency.

• Segment Performance

  The Taobao and Tmall group, Alibaba's core China commerce business, grew revenue 13% year-over-year. Customer management revenue was up 10%, reflecting growth in merchant advertising spend and GMV. Alibaba International commerce revenue grew 41%, driven by 60% growth in international retail revenue. Local services and Cainiao logistics revenues grew 30% and 34% respectively.

   

  Cloud computing revenue grew 4% driven by public cloud and Alibaba Cloud Intelligence revenue growth, partly offset by normalization of demand for some project-based services. Digital media & entertainment revenue grew 36% due to growth in online entertainment subscriptions and offline event ticketing.

• Cash Flow and Balance Sheet

  Alibaba generated RMB45.31 billion ($6.25 billion) in net cash from operating activities in Q1, up 34% year-over-year. Free cash flow improved 76% to RMB39.09 billion ($5.39 billion). As of June 30, 2023, Alibaba reported cash, cash equivalents and short-term investments of RMB510.36 billion ($70.38 billion).

   

  During the quarter, Alibaba spent RMB22.15 billion ($3.06 billion) to repurchase 35.6 million ADS. This demonstrates Alibaba's commitment to enhancing shareholder value through its share buyback program.

   

  Overall, Alibaba delivered strong top and bottom line growth along with solid cash generation in Q1 FY2024. The results demonstrate the resilience of Alibaba's diversified business model and its ability to drive higher profitability through operating leverage.

Source: Alibaba Group Announces June Quarter 2023 Results (data.alibabagroup.com) >>

3. Alibaba FY2024 Q2 Business Segment Data

Organizational Restructuring

Alibaba implemented a major organizational restructuring during Q1 to create a holding company structure with 6 independent business groups. These groups are:

● Taobao and Tmall - Core China commerce

● Alibaba International Digital Commerce - International retail and wholesale

● Local Services Group - Ele.me and Amap platforms

● Cainiao Smart Logistics Network

● Cloud Intelligence Group - Alibaba Cloud and DingTalk

● Digital Media and Entertainment Group - Youku, Damai etc.

● This reorganization aims to promote greater accountability, innovation and vitality within each business unit. It also allows them to focus on long-term growth with a higher degree of independence.

Business Group Updates

Taobao and Tmall - Grew average daily active users by 6.5% year-over-year in June, driven by effective user acquisition and retention programs. The 6.18 Shopping Festival generated solid order and spending growth.

International Commerce - Strong order growth of around 25% across all major international retail platforms like Lazada, AliExpress and Trendyol. Improved monetization and unit economics.

Local Services - Revenue grew 30% driven by over 35% order growth at Ele.me and Amap. Losses continued to narrow as scale and efficiency improves.

Cainiao - Revenue grew 34% driven by cross-border and domestic logistics services. Expanded value-added fulfillment services in China and internationally.

Cloud Intelligence - Overall revenue grew 4%. Alibaba Cloud grew non-ecosystem revenue in areas like financial services and electric vehicles. Unveiled new AI products.

In summary, Alibaba made significant progress growing users and order volumes across its commerce businesses in China and internationally. Profitability of emerging units like Ele.me and Trendyol improved driven by strengthening unit economics. The reorganization lays the foundation for sustaining innovation and growth.

Source: Alibaba Group Announces June Quarter 2023 Results (data.alibabagroup.com) >>

Part 3：Alibaba FY2024 Q3 Earnings Report Forecast & Preview

1. Alibaba FY2024 Q3 Forecast By Third Party Analyst Rating, December 4th

Following an extensive evaluation of Tesla's financial data, revenue, and stock trends over the last few quarters by more than 21 third-party financial analysts, BABA Stock has been given a Strong Buy rating. Analysts forecast an average stock price of $124.000 (Average) for the next 12 months.

- Third Party Analyst rating: Strong Buy

- Alibaba Price Target: $124.000

- Forecast of FY2024 Q3 EPS: $2.187

- Forecast of FY2024 Q3 Revenue: $37.7B

- Forecast of FY2024 Q3 EBIT: $6.3B

Source: https://www.benzinga.com/quote/BABA/analyst-ratings

For more information on what the analyst ratings may mean, visit https://pro.benzinga.com/blog/what-do-stock-analyst-ratings-mean/ (Benzinga is not affiliated with Moomoo Technologies Inc., Moomoo Financial Inc., or its affiliates.)

2. Alibaba Forecast By Technical Analysis, December 4th, 2023

For more information, such as definitions and explanations of the above technical terms, please view: 

Interpretation of technical indicators >>

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