What to watch for in Alibaba earnings
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Alibaba set to report first quarter as public company
NEW YORK (MarketWatch) - Alibaba Group Holdings Limited, the giant Chinese e-commerce company, is scheduled to report its first earnings report since becoming a public company before the bell on Tuesday.
Investors will be waiting to see if Alibaba can keep the upward momentum going in the stock, which has performed very well since they went public less than two months ago.
Here's what investors can expect:
Earnings: Alibaba is expected to report fiscal second-quarter per-share earnings of 44 cents a share, according to the average estimate of analysts surveyed by FactSet.
Revenue: Revenue for the quarter ended in September is expected to be $2.61 billion. In the previous quarter ended June 30, the company said it in a filing with the Securities and Exchange Commission that revenue rose 46% from year-earlier levels to $2.54 billion.
Share Price: Alibaba's stock rose to a fresh all-time high in afternoon trade Monday, about 50% above the initial-public-offering price of $68, and about 9% above where it closed on the first day of trading on Sept. 19. In comparison, the S&P 500 has gained just 0.4% since Sept. 19.
At current prices, Alibaba's market-capitalization of $251.6 billion was above that of the world's largest brick-and-mortar retailer, Wal-Mart Stores which had a market-cap of $245.5 billion.
The average analyst rating on the stock is buy, according to FactSet. The average price target is $110.30, or nearly 8% above current levels.
Analysts from firms that were underwriters of Alibaba's IPO initiated coverage of the company's stock with mostly bullish ratings.
Other issues: Outside of earnings and revenue, investors will be looking for data on gross merchandise volume (GMV), mobile monetization and margins.
MKM Partners analyst Rob Sanderson is expecting GMV growth to decelerate to 43% from 64% a year ago, and from 45% in the previous quarter.
And Wedbush Morgan analyst Gil Luria are expecting mobile monetization to improve by at least 0.05 percentage points from June's 1.49% rate, and margins to be 'close to 50%.'
Luria also believes Alibaba's acquisition strategy will be of focus of questions from investors on Alibaba's conference call following its earnings report, especially as it relates to media and entertainment. 'We believe [Alibaba's] media strategy is aimed at controlling the set-top box e-commerce channel,' Luria wrote in a note to clients.
Another area of interest for investors will be any further comments regarding a potential partnership with Apple Inc. after Apple Chief Executive Tim Cook said recently that the technology giant was ' getting married ' with Alipay, a firm linked to Alibaba.
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