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What's in the Offing for Alibaba (BABA) in Q2 Earnings?

Zacks Equity Research
·4-min read

Alibaba Group Holding Limited BABA is scheduled to report second-quarter fiscal 2023 results on Nov 17.

For the fiscal second quarter, the Zacks Consensus Estimate for revenues is pegged at $31.07 billion, suggesting a 0.3% dip from the year-ago fiscal quarter’s reported figure.

The Zacks Consensus Estimate for earnings is pegged at $1.67 per share, indicating a decline of 4% from the prior-year fiscal quarter’s reported figure. The figure has moved 0.6% south over the past 30 days.

Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average surprise being 9.4%.

Alibaba Group Holding Limited Price and EPS Surprise

Alibaba Group Holding Limited Price and EPS Surprise
Alibaba Group Holding Limited Price and EPS Surprise

Alibaba Group Holding Limited price-eps-surprise | Alibaba Group Holding Limited Quote

Factors to Consider

Alibaba's strong efforts to add value to consumers and sellers through the consumer segment, product enrichment and platform innovations are expected to have driven growth in its e-commerce business in the to-be-reported quarter by driving its customer momentum.

The infusion of advanced technologies, such as Big Data and AI into BABA's e-commerce platform, is expected to have continuously enhanced its customer experience.

Well-performing Lazada is likely to have aided the performance of Alibaba's International commerce retail business in the fiscal second quarter.

Solid momentum across cross-border-related value-added service is expected to have contributed well to the International commerce wholesale business.

The growing momentum across paying members on 1688.com and wholesale buyers is expected to have been a tailwind to the commerce wholesale business in China during the fiscal second quarter.

Increasing traction in direct sales businesses like Alibaba Health and Freshippo might have been a tailwind to BABA’s China commerce retail business during the fiscal quarter under review.

Apart from e-commerce, Alibaba 's robust cloud segment is expected to have sustained its momentum in the fiscal second quarter on a growing number of paying customers. Moreover, strength in financial services, public services and telecommunication industries is likely to have constantly benefited Alibaba Cloud’s performance.

Additionally, robust Cainiao logistics services are expected to have driven the upcoming results.

However, softness in online physical goods GMV at the Taobao and Tmall marketplaces might have been a headwind.

Further, the weakening momentum of AliExpress in Europe due to supply-chain and logistics disruptions as a result of the ongoing Russia-Ukraine conflict is expected to have been a woe.

Also, sluggishness in Alibaba Pictures, Youku and other entertainment businesses might have been a concern during the fiscal second quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Alibaba this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Alibaba has an Earnings ESP of 0.70% and a Zacks Rank #4 (Sell), currently.

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.

Analog Devices ADI has an Earnings ESP of +1.10% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices is scheduled to release fourth-quarter fiscal 2022 results on Nov 22. The Zacks Consensus Estimate for ADI’s earnings is pegged at $2.58 per share, suggesting a 49.1% increase from the prior-year fiscal quarter’s reported figure.

Adobe ADBE has an Earnings ESP of +0.45% and a Zacks Rank of 3 at present.

Adobe is scheduled to release fourth-quarter fiscal 2022 results on Dec 15. The Zacks Consensus Estimate for ADBE’s earnings is pegged at $3.50 per share, suggesting a 9.4% rise from the prior-year fiscal quarter’s reported figure.

Dollar Tree DLTR has an Earnings ESP of +6.57% and is presently Zacks #3 Ranked.

Dollar Tree is set to report third-quarter 2022 results on Nov 22. The Zacks Consensus Estimate for DLTR’s earnings is pegged at $1.16 per share, suggesting a 20.8% increase from the prior-year fiscal period’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Analog Devices, Inc. (ADI) : Free Stock Analysis Report
 
Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
 
Adobe Inc. (ADBE) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
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Zacks Investment Research