Alibaba Group Holding Ltd (NYSE: BABA) stock traded higher by 1 percent on Thursday morning after the company reported a big fiscal second-quarter earnings beat and raised its full-year guidance.
Despite Alibaba’s massive size and position as the largest e-commerce company in China, Alibaba reported its largest year-over-year revenue growth as a public company.
Alibaba reported adjusted earnings per share of $1.29 on revenue of $8.28 billion. Both numbers topped consensus analyst estimates of $1.04 and $7.87 billion, respectively. Alibaba’s revenue was up 61 percent compared to that same quarter a year ago.
Alibaba also raised its full-year revenue growth guidance from a previous range between 45 and 49 percent to a new range between 49 and 53 percent.
Cloud computing revenue increased by 99 percent from a year ago to $447 million.
Operating margin was 30 percent.
Alibaba reported 488 million active users for its retail marketplaces and said its core commerce revenue grew 63 percent on the quarter. Alibaba also added 20 million mobile active users to bring its user count to 549 million.
Alibaba said it is seeing positive early results from its push into physical retail as part of its omnichannel retail initiative. U.S. rival Amazon.com (AMZN) has also embraced the omnichannel retail approach via its buyout of Whole Foods Market.
“The margins were better than expected,” Haitong International Securities analyst Billy Leung said, according to Bloomberg. “It’s definitely a positive for the company.”
Despite the fact that Alibaba stock is up more than 110 percent in 2017, HSBC analyst Chi Tsang said last month that Alibaba is still a solid value for investors given its staggering growth and relatively modest 2019 projected earnings multiple of about 25.
“Alibaba has valuable data assets on its consumers that it can leverage to increase value to both its brands and buyers, resulting in high monetization and margins,” Tsang writes. “Second, it is…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
