Chinese e-commerce giant Alibaba Group (NYSE:BABA) is expected to release its third quarter Fiscal 2023 results around the middle of February. The Street expects BABA to post an adjusted profit of $2.45 per ADS in Q3, compared with the year-ago quarter figure of $2.49 per ADS. Meanwhile, revenue is pegged at $36.48 billion, lower than Q3FY22 revenue of $38.01 billion.
Factors Affecting Q3 Performance
The regional lockdowns due to China’s strict COVID-19 policy might have hurt fiscal Q3 results to some extent.
As per data provided by the National Bureau of Statistics of China, total retail sales declined 1.8% year-over-year in December. This marked the third straight month of a fall in sales. Similarly, for the full year 2022, the figure fell by a modest 0.2%. Thus, Alibaba’s top-line growth is expected to be muted.
Nevertheless, strong domestic demand for its cloud business is expected to provide some support to Alibaba’s fiscal Q3 performance. Further, the company’s focus on diversifying its non-Internet business seems to be paying off. The unit witnessed solid growth in the last quarter, with the trend expected to have continued in the to-be-reported quarter as well.
Furthermore, the TipRanks’ Website Traffic Tool suggests that things are improving for Alibaba, which has struggled due to a slowdown in consumption and heightened competition. TipRanks’ Website Traffic screener shows that the number of visits to Alibaba’s websites — aliexpress.com, alibaba.com, and taobao.com increased by 14.6% (year-over-year) for the December ending quarter.
Is BABA a Buy or Hold?
On TipRanks, BABA stock is a Strong Buy. It has 16 unanimous Buy recommendations. Moreover, the analyst’s price target of $138.53 implies 24.6% upside potential.