What To Watch For In Alibaba’s Q3 Earnings

Alibaba (NYSE:BABA) reports its Q3 on January 30. The company’s stock had fallen on the back of a 4-6% reduction in management’s guided revenue range for fiscal 2019. We expect the company to have some positive commentary around the outlook for 2019 on the back of the stimulus package that the Chinese government is rolling out. It will also be interesting to gain some more information surrounding Jack Ma’s new role at the company.

We currently have a price estimate of $173 per share for Alibaba, which is around 15% higher than the current market price. Our interactive dashboard on Alibaba’s Price Estimate outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation.

Owing to an economic slowdown in China and the ongoing trade disagreements between the U.S. and China, Alibaba has already indicated its expectations of a lower growth. However, on the back of expected stimulus packages to the tune of $200 billion from the Chinese government, we will be listening for management’s expectations of acceleration in retail growth on the back of tax cuts and other factors.

Another key area of focus will be how the stock reacts to Jack Ma’s thoughts and role at the company. Last year in September, after Alibaba’s co-founder and executive chairman announced his decision to retire, the stock fell nearly 20% from the date of the announcement on September 7 to around $130 at the end of October, though it has rebounded since then. While part of the fall can be attributed to the broader market correction, Ma’s decision to pursue philanthropy in education also likely contributed significantly. Ma was previously an English teacher and will continue to be on Alibaba’s board, while holding a 6%-plus stake in the company. Despite the relatively minor stake, Ma may have a lot more control in the company due to its complex legal structure.

Do not agree with our forecast? Create your own price forecast for the Symantec by changing the base inputs (blue dots) on our interactive dashboard.