Chinese e-commerce giant Alibaba Group (NYSE: Bubba) plans to release its third quarter 2023 results on February 1, before the market opens. Regional lockdowns due to China’s stringent COVID-19 policies may have had some impact on Q3 results.
The Street expects BABA to post an adjusted gain of $2.45 per ADS in the third quarter. Meanwhile, revenue is pegged at $36.48 billion, below his $38.01 billion earnings for the third quarter of fiscal year 2022.
Factors Affecting Third Quarter Results
Data provided by China’s National Bureau of Statistics showed that total retail sales fell 1.8% year-on-year in December. This marked his third month in a row of declining sales. Similarly, for the full year 2022, this figure decreased by just 0.2%. Alibaba’s top-line growth is therefore expected to be subdued.
Nonetheless, strong domestic demand for cloud business is expected to provide some support to Alibaba’s financial third quarter results. Additionally, the company’s efforts to diversify its business beyond the Internet appear to be paying off. The unit has shown solid growth in the last quarter and is expected to continue that trend in future reported quarters.
Moreover, TipRanks’ website traffic tool suggests things are improving for Alibaba, which is struggling with slowing consumption and increasing competition. According to TipRanks’ website traffic screener, traffic to Alibaba’s websites (aliexpress.com, alibaba.com, taobao.com) increased by 14.6% (year-on-year) in the final quarter of December.
BABA Buy or Hold?
BABA stock is a strong buy on TipRanks. There are 16 unanimous purchase recommendations. Additionally, the analyst target price of $138.53 suggests a 24.6% upside potential.