Chinese e-commerce giant Alibaba (BABA) is set to announce its Q1 FY26 earnings results on August 29. The stock has jumped over 46.5% year-to-date, driven by strong growth in AI-powered cloud services and rising demand for instant delivery. Wall Street analysts expect the company to report earnings of $1.98 per share for Q1, down 14% from the year-ago quarter. Notably, Alibaba missed EPS estimates thrice out of the last nine quarters.
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Meanwhile, analysts project Q1 revenues at $35.15 billion, according to the TipRanks Analyst Forecasts Page. The figure marks a year-over-year increase of about 5%. Management had pointed to accelerating growth earlier, led by AI, Cloud, and improving international e-commerce margins.
Recent Events
Bloomberg reported today that Alibaba plans to refinance $6.5 billion in loans. The move is designed to ease near-term debt pressure while giving the company more flexibility to invest in its main growth areas, namely cloud, AI, and food delivery.
Analyst’s Take on BABA Ahead of Q1 Results
Ahead of the Q1 results, Mizuho analyst Wei Fang maintained an Outperform rating on Alibaba but trimmed his price target to $149 from $160, pointing to rising margin pressure. He noted that competition in China’s local commerce space, especially in food delivery and quick retail, is starting to weigh on profits.
Fang expects Q1 margins to fall sharply from the prior quarter. He also warned that margin strain could persist through 2025 and into 2026 unless regulators step in to ease the pricing war. As a result, Mizuho lowered its Q1 EBITDA forecast from RMB 55 billion to RMB 45 billion and cut its FY27 EBITDA projection to RMB 231 billion.
Options Traders Anticipate a 6.14% Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry; the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 6.14% move in either direction.
Is Alibaba Stock a Good Buy Right Now?
Analysts remain highly bullish about Alibaba’s stock trajectory. With 12 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $148.55 implies about 21.53% upside potential from current levels.
