China's Alibaba Q4 revenue rises 3%, helped by cloud growth

Overview

• China e-commerce and cloud giant's fiscal Q4 revenue rose 3% yr/yr

• Adjusted EPS for fiscal Q4 fell 95% yr/yr

• Operating margin dropped to 0% from 12% a year earlier

Outlook

• Company expresses confidence in business outlook, citing ongoing AI and cloud investments

• Alibaba sees strong momentum in AI-related cloud products and continued integration of AI in e-commerce

Result Drivers

• TECHNOLOGY AND QUICK COMMERCE INVESTMENT - Co said lower adjusted EBITA and operating loss were mainly due to increased investment in technology businesses, quick commerce, and user experiences

• CLOUD GROWTH - Cloud Intelligence Group revenue rose 38% yr/yr, with external revenue up 40%, mainly driven by public cloud and AI-related products

• QUICK COMMERCE EXPANSION - Quick commerce revenue rose 57% yr/yr, mainly due to order growth from the rollout of Taobao Instant Commerce

Company press release: ID:nBw7yzTfHa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 28 "strong buy" or "buy", 2 "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 HK$172.00, about 29.5% above its May 13 closing price of HK$132.80

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 21 three months ago

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