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Alibaba Stock Stabilizes On Revenue Beat Despite Coronavirus Impact; Analysts Lift Targets

alibaba stock

Alibaba (NYSE: BABA) stock price reversed some losses that it had made during the last couple of weeks due to the threat of coronavirus. Alibaba is the largest Chinese online retailer that has extensive foot-prints in global markets. Some investors believe the outbreak of coronavirus could have a drastic impact on BABA’s financial numbers. This is because the majority of countries have suspended their trade relationship with China following the outbreak of epidemic disease.

Alibaba stock price, however, stabilized after beating fourth-quarter revenue and earnings estimates. BABA share price is trading around $220 at present, down slightly from twelve months high of $230 a share. Some market analysts have also raised BABA share price target despite Coronavirus attack.

BABA Alibaba Group Holding Limited daily Stock Chart

Alibaba Beats Fourth-Quarter Estimates

BABA topped fourth-quarter revenue and earnings estimate by RMB161.46B and RMB2.49 per share, respectively.  Its fourth-quarter revenue of RMB161.46B increased by 38 per cent from the past year period. The cloud revenue soared 62 per cent to RMB 10.72B from the past year period. The fourth-quarter mobile active users stood around 824ml, up from the consensus estimate for 804.7ml. The company has also been converting revenue growth into profits at a sharp pace. Its fourth-quarter earnings per share rose 49 per cent from the past year period.

We had a successful listing on the main board of the Hong Kong Stock Exchange in November and delivered strong results for the quarter, with top-line revenue growth of 38% year-over-year and adjusted EBITDA growth of 37% year-over-year,said Maggie Wu, Chief Financial Officer of Alibaba Group.

Alibaba Stock Stabilizes On...

Analysts are Optimistic about Alibaba Stock despite Coronavirus

Baird has provided an outperform rating with a price target of $230. “The situation in China is fluid and could lead to further model tweaks, however, reports suggest that people are poised to slowly get back to work,” Baird analyst Colin Sebastian said.

During the earnings call conference, the company anticipated a significant impact of coronavirus on its future financial numbers.  The company believes its businesses that rely on physical goods will likely see revenue declines in the current quarter.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.