When Alibaba Group Holding reports its first earnings since going public on Tuesday (Nov. 4), Wall Street analysts will either be calmed or will royally freak out. All things considered, there’s nothing likely inbetween.
That’s because the expectations for Alibaba are mammoth. First, it’s NYSE IPO debut was a record $25 billion and it’s share price has already soared 45 percent since that IPO, “giving it a market value of $243 billion as of Friday (Oct. 31), bigger than Facebook,” noted The Wall Street Journal. Beyond the usual revenue and profit stats, analysts will be pouring any numbers or comments about smartphone apps, E-Commerce efforts, mobile payment moves, acquisitions and particularly any hints about Alipay’s financial services interests and possible partnership with Apple Pay.
“Every investor will be looking at the results very closely,” the Journal quoted Tony Chu, a Hong Kong-based portfolio manager at RS Investments, as saying. “As a public company, Alibaba needs to disclose more and talk to investors more.”
Another analyst quoted, Jefferies analyst Cynthia Meng, said her firm added Alibaba to its coverage list because of the huge payments and E-Commerce potential. “We estimate well over half of the Chinese population will be shopping on Alibaba’s platforms in 10 years,” Meng said. The story added that she has “set Alibaba’s price target at $118 for the next 12 months—20 percent higher than its $98.60 close on Friday—saying there is plenty of room for growth as e-commerce expands into smaller cities and rural areas in China, helped by improving wireless infrastructure and affordable smartphones. The brokerage expects Alibaba’s annual revenue growth to average 36 percent over the next three years.”