Key Takeaways From Alibaba Earnings & What To Expect Through FY’19

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BABA: Alibaba Group logo
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Alibaba Group

Alibaba (NYSE:BABA) announced its fiscal Q4 and full year 2018 earnings on May 4, reporting a nearly 60% annual increase in revenues for the quarter and the year to ¥62 billion and ¥250 billion, respectively. The e-commerce giant has reported strong year-over-year growth in revenues across segments over the last few years, with recent acquisitions further fueling growth. Alibaba’s impressive performance across segments, and the company’s forays into multiple markets have had a positive impact on shareholders, which led its stock price to rally in the last year.

The company has shown clear intent to expand its e-commerce business in international markets as well as to expand to offline retail domestically. This should help drive growth in the long run. In the near term, the company’s solid revenue growth from existing businesses is expected to continue to drive results. We forecast Alibaba’s FY’19 net revenues to increase at a more conservative 30-35% to ¥328 billion ($52 billion), as compared to the consensus estimate of ¥350 billion ($55 billion). We forecast adjusted EBITDA margins to continue to fall gradually over FY’18 levels at just over 41%. Continued expansion efforts and venturing into offline retail should limit margin improvement over the next couple of years. We have created an interactive analysis where we have summarized our expectations for Alibaba’s combined full year results for FY’19. If you disagree with our forecasts, you can change expected segment revenue and EBITDA margin figures for Alibaba to gauge how it will impact expected EPS for the full year.

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See Our Full Analysis For Alibaba

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