Alibaba (BABA) Strong GMV Growth and Cloud Revenue For Earnings Beat

Market is expecting BABA to show a rise in quarterly revenue with a 6.4% increase in revenue to CNY 249.05 billion from CNY 234.16 billion a year ago.

Earnings per share is expected for Alibaba Group Holding Ltd to be CNY15.24 per share or $2.09 per share.

Lazada, the Southeast Asian online shopping platform of Alibaba Group Holding, has achieved a monthly profit for the first time, according to an internal announcement.

In an announcement during the firm's town hall meeting on Tuesday, Singapore-based Lazada was said to have recorded positive earnings before interest, taxes, depreciation and amortisation (Ebitda) - an alternate measure of profitability to net income - in July. Alibaba owns the South China Morning Post.

With this Ebitda-positive status, it show the result of Lazada's business strategy, and this effectiveness would allow BABA to invest more in the Southeast Asian market under a sustainable operating model.

On 19 June, Bloomberg Intelligence released an analysis of the China 618 shopping festival on June 19, predicting that the transaction volume (GMV) of Alibaba's Taobao and Tmall will grow by more than 10% this year, reflecting the new management team's initial success in responding to China's e-commerce competition.

This should be reflected in the upcoming earnings and we should see an increase in the revenue contributor from Taobao and Tmall

I would be expecting a bigger revenue contribution coming from Taobao and Tmall, and also Lazada. Not forgetting the Alicloud as there have been many service providers reaching outside of China for their chinese based companies to set up shops especially in Southeast Asian.

I am also expecting a growth in their Alicloud revenue, hence, earning beat should be possible, but the range might be limited.

Based on 16 Wall Street analysts offering 12 month price targets for Alibaba in the last 3 months. The average price target is $104.56 with a high forecast of $124.90 and a low forecast of $80.00. The average price target represents a 28.93% change from the last price of $81.10.

I would think Alibaba price should be coming back to the near $90 with the upcoming earnings, as I am expecting better performance from its Taobao and Tmall, and also the Alicloud business should also have a significant contribution to the revenue.

Though we have seen BABA experiencing some volatile trading on its stock price, it still manage to give more than 6% to investors.

WIth the improvement expected for the revenue coming from strong performance during 618 shopping promotion, we should see a strong result.

And the Alicloud have managed to avoid the major outage caused by CrowdStrike, we might see more enterprises going to Alicloud as a backup cloud.

Though there is no confirmed MACD bullish crossover, we could see that BABA is trading in an upward trend, with KDJ making some adjustment towards an upside movement, we could be expecting some strong interest coming to this stock, and I am expecting a nice upside move.

I will be watching closely to take a position as the current price looks reasonable.

Alibaba is expected to have strong GMV growth and I would think the contributor could come from Lazada and the Taobao. BABA strategy for Lazada on the Southeast Asian market should be giving them the results.

And I am also expecting their Alicloud to grow as they have expanded significantly to key regions and locations.

Appreciate if you could share your thoughts in the comment section whether you think BABA earnings beat is possible with stronger GMV growth and also strong cloud business growth.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.