Alibaba Q3 revenue up on AI, quick commerce demand; profit hit by investments
Overview
Alibaba Q3 revenue grows 5% yr/yr, driven by AI and cloud segments
Income from operations drops 85% yr/yr due to strategic investments in quick commerce, user experiences and technology
Company repurchased $253 mln in shares during Q3
Outlook
Alibaba expects near-term profitability to fluctuate due to strategic investments
Company continues to invest heavily in AI and cloud infrastructure
Alibaba focuses on AI technologies and consumption platform for future growth
Result Drivers
AI AND CLOUD GROWTH - Strong demand for AI-related products drove 34% revenue increase in Cloud Intelligence Group
QUICK COMMERCE EXPANSION - Quick commerce revenue rose 60% due to improved logistics and customer retention
INVESTMENT IMPACT - Income from operations fell 85% due to strategic investments in AI, cloud, user experience and quick commerce
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue |
| RMB 247.80 bln |
|
Q2 Adjusted EPS |
| RMB 0.55 |
|
Q2 EPS |
| RMB 1.09 |
|
Q2 Adjusted Net Income |
| RMB 10.35 bln |
|
Q2 Net Income |
| RMB 20.61 bln |
|
Q2 Operating Margin |
| 2.00% |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 39 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the online services peer group is "buy"
Wall Street's median 12-month price target for Alibaba Group Holding Ltd is $203.00, about 20.8% above its November 24 closing price of $160.73
The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 13 three months ago
Press Release: ID:nBw6TpGnXa
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact RefinitivNewsSupport@thomsonreuters.com.
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