Alibaba Dips Into Earnings. What To Expect Before The Opening Bell

Alibaba Group Holding Ltd. (HKG: 9988), the Chinese e-commerce behemoth, is poised to release its fiscal Q3 FY25 financial results before the U.S opening bell tomorrow. Anticipation is high, with the stock having gained an impressive 48% year-to-date. Unsurprisingly, there could be an element of profit taking or risk management leading into the pre-market print, with the stock trading down 1% on the day.

Converting into USD, markets are looking for Alibaba to report earnings of $2.66 per share, marking a 2.7% increase compared to the same period last year. Additionally, revenue is expected to grow by 6%, reaching approximately $38.33 billion.

Historically, Alibaba missed on revenue in each of the past two quarters, with EPS also having missed on 2 out of the past 3 prints.

Not to be swayed by pending numbers, analysts at Baird raised their Alibaba price target to $125 ($110) whilst maintaining an Overweight rating.

A significant factor driving recent investor optimism was Alibaba's integration agreement with Apple to include the Qwen 2.5 model in iPhones sold within China. This collaboration is seen as a strategic move to enhance Alibaba's presence in the smart technology space, potentially expanding its market reach and influence.

Financial analysts remain bullish on Alibaba's stock prospects. Alex Yao, an analyst from JPMorgan, has rated the stock as a buy with a price target of $125. Meanwhile, Jefferies analyst Thomas Chong has set a higher price target of $150. Collectively, Wall Street analysts share a buy consensus on Alibaba stock, however recent price target upgrades are just about keeping pace with the price action, such has been the rise in the BABA price this year.

While Alibaba faces various industry-wide challenges, its strategic partnerships and solid financial forecasts continue to attract investor attention, setting a promising outlook for the upcoming Q3 FY25 earnings release.