Alibaba (NYSE:BABA) has been the Chinese bellwether on American stock markets ever since it went IPO three years ago. For a while after the big-bang IPO, the stock did not do too well, but over the last 15 months or so, the stock has nearly doubled! Especially over the last 6 months, in a very positive tech growth environment where almost every US tech stock has grown tremendously, $BABA investors would have benefitted immensely. The stock went from $102.12 to $120.02 in just the last 3 months.

We thought this might be a good time to look at what analysts and investors expect from the latest earnings of Alibaba and what is the general mid-to-long term view.

BABA Confidence Meter

Stockal’s Confidence Meter for Alibaba

Looking at a simple juxtaposition of the stock price with Stockal’s Confidence Meter, it can be seen that there has been general bullishness about Alibaba from the Wall St analyst community. In fact, Confidence Meter went from 64% around April 11 to 79% by April 25 2017. The Avg Consensus Price Target also stands at a healthy $130.

The actual price has been moving constantly towards the target price over the last 3 months. IN CASE, the stock breaches the $130 mark, it will be interesting to observe if it goes beyond all falls back down. This, in effect, will help us determine if Alibaba is a good bet for the next 6 months. That said, whether it can reach $130 or not is itself moot right now. The following part of this post will explain, why.

Revenue Prediction

Alibaba Revenue Prediction

Not a pretty short-term picture, this graph! But ..

Estimates suggest a $5.2 billion announcement with the earnings call. While there appears to be a quarterly fall, what’s significant is that the revenue in the same quarter last year (2016) was $3.7 billion. So this is a healthy 40% rise y-o-y. It will be interesting to wait and see if this matches or betters the company’s revenue guidance – yearly as well quarterly.

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At Stockal, we love to watch how markets respond to unique events and how our users (investors - you and old) can make the best use of circumstances to make smart investments. In Thoughts@Stockal, we do deep and broad analysis of such impactful trends and events.

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