Alibaba Delivers Mixed Quarterly Results

Alibaba (BABA) delivered mixed financial results for the Q3 2022 ended December 31, 2021, as the company continued to execute its multi-engine growth strategy in a complex and volatile market environment. Earnings topped consensus estimates, but revenue missed despite growing 10% year-over-year. BABA shares fell 0.72% to close at $108.93 on February 24.

Alibaba is a Chinese company that operates online and mobile marketplaces in retail and wholesale trade.

Earnings

Revenue in the quarter landed at $38.01 billion, up 10% from the same quarter in the previous year and slightly lower than the consensus estimate of $38.83 billion. The increase was mostly driven by overall growth in China’s e-commerce segment, which expanded 7% year-over-year.

Net income attributed to shareholders came in at $3.21 billion, down 74% year-over-year. Alibaba delivered non-GAAP diluted earnings per ADS of $2.65, down 23% year-over-year but better than consensus estimates of $2.55.

The total number of active consumers in the Alibaba ecosystem rose to 1.28 billion for the 12 months ended December 31, 2021, representing an increase of 43 million year-over-year. The e-commerce giant had 979 million consumers in China and 301 million overseas.

During the quarter ended December 31, 2021, Alibaba repurchased 10.1 million shares for about $1.4 billion. For the nine months ended December 31, 2021, the company repurchased 42.2 million shares for about $7.7 billion.

Stock Rating

Citigroup analyst Alicia Yap recently reiterated a Buy rating on Alibaba stock with a $216 price target, implying 98.29% upside potential to current levels.

Consensus among analysts is a Hold based on 18 Buys and 2 Holds. The average Alibaba price target of $188.56 implies 73.10% upside potential to current levels.

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