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- WSJ reported that BABA's Tmall Global is not gaining as much traction 10 months after launch, implying the platform is failing to live up to market expectations.
- On the contrary, I believe Tmall Global's current progress to be encouraging.
- Investors can expect higher traffic from 1) increasing merchant base and 2) introduction of an ad-based model.
- Long BABA.
- Alibaba has three non-GAAP metrics, but do they really tell the true story of the company?
- Non-GAAP metrics are generally used to provide insight into a company's operations vs. traditional GAAP metrics.
- The results are pretty interesting considering that Alibaba has received heat for being overly complicated and non-transparent.
- The “platform” business model usually generates higher margins than the “direct retailing” model.
- Alibaba’s platform business model has drawbacks such as lower control of product quality and weak logistic services.
- The demonstrated customer adherence to Taobao and Tmall marketplace plus the strong executive force in solving problems with its platforms will make Alibaba a more attractive investment opportunity than JD.
Alibaba & Double 12: There Goes Jack Ma Making Up Holidays Again
- Double 12 is another holiday designed to build off the enormous success of Alibaba's Singles Day.
- Alibaba's IPO money seemingly has helped them to promote this previously unknown event into another huge shopping "holiday".
- Promotions via the Alipay Wallet app drove many consumers to take advantage of 020 commerce special deals at stores where they otherwise probably would not have gone.
- The growth in Alipay's valuation, and eventual Chinese IPO, should be a significant driver for Alibaba stock in 2015. BABA's stake in the most recent valuation is $23 billion.
- How many Double Number shopping holidays can the enormous Chinese e-commerce market actually support?
- BABA released new data indicating that mobile accounts for 54% of transactions versus 22% a year ago.
- Increasing smartphone adoption driving m-commerce, which drives Alipay.
- Long-term growth lies in the integration of Aliyun ecosystem and penetration into North America.
Alibaba And Internet TV: If At First You Don't Succeed, Try, Try Again
- BABA is launching a new set of TVs in China to drive additional traffic to its e-commerce platforms.
- Integration of BABA's other assets in online video and content will be the key differentiators.
- BABA remains my top pick among US-listed e-commerce plays given the potential growth of the Aliyun ecosystem.
Alibaba Going Global Part II: Connecting East And West
- BABA will partner with US retailers to bring Black Friday to China.
- TMall is an important platform for foreign retailers to penetrate China without investing in warehouses and logistics.
- Expect additional retailers to leverage TMall; BABA is the main beneficiary of the trend.
Alibaba Exploded: Should Other Chinese Stocks Follow?
- Since its IPO, Alibaba has gained $113 billion in market cap.
- Alibaba isn't overvalued compared to other internet stocks, but is overvalued compared to other Chinese stocks that stand to benefit from growing eCommerce activity.
- Either Alibaba drops to a level more comparable to other Chinese stocks or these other stocks rise as the fear of fraud is replaced with the prospect of high growth.
- Reuters reported that Alibaba is interested in launching an international version of Taobao.
- Taobao's product mix could be compelling to international consumers; long-term threat to eBay and Amazon remain.
- Long BABA and GOOG, short EBAY. Neutral on AMZN.
- Alibaba controls a large chunk of China's B2C market, meaning the company's future growth in China could be tied to the industry itself.
- Alibaba must pursue international growth aside from B2C.
- A recent report states that BABA is planning to launch an international version to its Taobao Marketplace, a potential game changer.
Alibaba Debuts Its First-Ever Bond Offering To Investors
- Alibaba debuts its first-ever bond offering, expected to be around $8 billion, on Thursday.
- The company seeks fresh capital to expand to the West by creating a new digital "silk road" for intercontinental online trade.
- With the ebb and flow of short interest in Alibaba shares and its strengthened fundamentals, a contrarian view is timely.
- Alibaba is making waves with its overt romancing of Hollywood executives.
- Fresh off its $25 billion IPO, Alibaba is causing the rumor mill to go haywire over potential M&A.
- Instead of swooping in and rescuing Netflix, Alibaba should continue hustling Hollywood on its own.
- Hedge fund managers loaded up on BABA in Q3.
- As I previously wrote, supply/demand will drive prices for BABA in the early days.
- Valuations will eventually return to the forefront and BABA will probably look pretty expensive anywhere north of $100/share.
Wed, Nov. 5, 11:32 AM
- Plenty of firms (including many of the underwriters who just launched coverage) have hiked their Alibaba (BABA +3.5%) after the company beat FQ2 revenue estimates yesterday (while posting in-line EPS) on the back of strong GMV growth and improving mobile monetization. Both Alibaba and Yahoo (YHOO +2.3%) are making fresh highs.
- In addition to Alibaba's gains, Yahoo is benefiting from a bullish launch from SunTrust's Robert Peck. Peck considers the weakness in Yahoo's core properties priced in, and believes the Street is "giving little credit to some of the progress made more recently around mobile, native [ads], Tumblr, search, and video." He estimates the core business is being valued at less than 1x EV/EBITDA.
- Morgan Stanley likes Alibaba's 262% Y/Y mobile GMV growth, and thinks the acceleration seen in Taobao GMV points to improved conversion rates. Meanwhile, Jefferies and BofA/Merrill are pleased with management remarks suggesting an average customer's spending grows considerably over time.
- Cantor: "A differentiated pricing model, strong brand and unmatched scale continue to give Alibaba an unfair competitive advantage relative to peers both in and outside China. We believe the company's outsized growth and margin profiles should support higher valuation over time."
- The firm has hiked its FY15 revenue and EPS estimates, albeit while slashing its EBITDA estimate on expectations spending will remain elevated. Alibaba, for its part, doesn't plan to provide guidance.
Tue, Nov. 4, 9:44 AM
- Though it beat FQ2 revenue estimates and posted in-line EPS, Alibaba (BABA +0.6%) reported an 890 bps drop in non-GAAP EBITDA margin to 50.5%. On the CC (live blog), the company attributed the drop to higher marketing spend, mobile OS (YunOS) investments, and the costs of integrating newly-acquired businesses.
- Not counting stock compensation expenses - thanks partly to the IPO, they rose to 17.9% of revenue from 7.9% a year ago - costs/expenses rose to 52.7% of revenue from 43.4% a year ago. Alibaba notes it increased its "tactical advertising and promotional spending" for its Chinese retail marketplaces.
- Those marketplaces performed well: GMV for Alibaba's Taobao marketplace (focused on smaller merchants) rose 38% Y/Y to RMB380B, and GMV for Tmall (focused on larger merchants) rose 78% to RMB176B.
- Also encouraging: Mobile monetization rate jumped to 1.87% in FQ2 from 1.49% in FQ1 and 0.61% a year ago. That allowed total monetization rate to fall just 1 bps Y/Y to 2.30%, in spite of a mix shift towards mobile (now 35.8% of GMV and 29.1% of revenue).
- Total China commerce revenue rose 47% Y/Y to RMB13.56B, and international commerce revenue (much of it from Alibaba.com and AliExpress) 38% to RMB1.62B. Wholesale business accounted for 74% of international revenue, but just 6% of China revenue.
- CFO Maggie Wu says it's Alibaba's policy to not give out guidance.
- FQ2 results, details, PR
Tue, Nov. 4, 7:33 AM
- FQ2 operating income of $708M down 17.2% from a year ago thanks to a big boost in share-based compensation. Non-GAAP EBITDA of $1.384B up 30.6%. Non-GAAP EPS of $0.45 up 9.4%.
- Gross merchandise volume (GMV) of $90.529B up 48.7% Y/Y, up 10.9% from FQ1. Mobile GMV as a percentage of total of 35.8%, up from 14.7% a year ago.
- Annual active buyers of 307M up 52% Y/Y. Mobile monthly active users of 217M up 138.5%.
- No forward guidance is provided.
- Previously: Alibaba EPS in-line, beats on revenue
- Conference call webcast (no time given, but coming shortly)
- BABA +1.6% premarket
Tue, Nov. 4, 7:04 AM
Mon, Nov. 3, 5:30 PM
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Wed, Aug. 27, 9:52 AM
- In a revised F-1, Alibaba (Pending:BABA) discloses it had calendar Q2 revenue of $2.54B (+46% Y/Y), and net income of $1.99B (boosted by $1.1B in interest/investment income). Op. income was $1.1B (+27% Y/Y). Revenue growth accelerated from Q1's 39% clip, a figure that had disappointed some investors.
- Q2 free cash flow was $1.71B. Sales/marketing spend +70% Y/Y to $195M; R&D +68% to $315M.
- GMV was RMB501B ($81.6B), +17% Q/Q and +45% Y/Y (46% growth was seen in Q1). Mobile accounted for 32.8% of GMV (up from Q1's 27.4%), and mobile revenue more than doubled Q/Q to $400M.
- Annual orders +14% Q/Q to 14.5B; annual active buyers +9% to 279M; annual active sellers +11% to 8.5M; mobile monthly active users (MAUs) +15% to 188M.
- Alibaba's Taobao marketplace (focused on smaller merchants) had a Q2 GMV of RMB342B, +33% Y/Y. The Tmall marketplace (focused on larger merchants) had a GMV of RMB159B, +81%.
- Yahoo (YHOO +0.3%) is up slightly following Alibaba's release, which might be the company's last earnings update before its IPO.
- Related tickers: OTCPK:SFTBF, OTCPK:SFTBY
Tue, Jul. 15, 4:33 PM
- Yahoo (NASDAQ:YHOO) has further amended its IPO share sale agreement with Alibaba (Pending:BABA): The company is now only required to sell 140M Alibaba shares at IPO time, down from a prior 208M.
- Yahoo also promises to return "at least half of the after-tax [Alibaba] IPO proceeds to shareholders." That could translate into several billion worth of buybacks and/or a big special dividend.
- The company guides in its Q2 earnings slides (.pdf) for Q3 revenue (ex-TAC) of $1.02B-$1.06B, below a $1.1B consensus. Adjusted EBITDA is expected to fall to $220M-$260M from $331M a year earlier, and op. income is expected to total $70M-$110M.
- Alibaba had Q1 revenue of $1.97B (+42% Y/Y), gross profit of $1.4B (+37%), and net income of $906M (+36%). The company already provided many Q1 details in a June F-1 filing. Yahoo Japan (OTCMKTS:YAHOF) had Q1 revenue of $1.06B (-6%), and net income of $311M (-10%).
- $719M was spent on buybacks in Q2, up from $450M in Q1.
- YHOO +1% AH. Q1 results, PR.
Mon, Jun. 16, 9:35 AM
- Alibaba (ABABA) had a GMV of RMB430B ($69.1B) for seasonally weak Q1, -19% Q/Q and +46% Y/Y. The Y/Y growth rate slipped from Q4's 53%.
- Active buyers grew 10% Q/Q to 255M. Mobile accounted for 27.4% of GMV, up from 19.7% in Q4 and 10.7% a year ago. Mobile MAUs +20% Q/Q to 163M.
- For the year ending March 31, Alibaba had revenue of $8.45B (+52% Y/Y), and adjusted net income of $4.44B. Free cash flow was $5.19B. Revenue growth slowed a bit from the 57% seen for the 9 months ending Dec. 31.
- Alibaba's Taobao (consumer-to-consumer) marketplace had a Q1 GMV of RMB295B (+32% Y/Y, 69% of total), and its Tmall site (business-to-consumer) a GMV of RMB135B (+90% Y/Y, 31% of total).
- Yahoo (YHOO) isn't responding well to the numbers. Alibaba still hasn't proposed a symbol or valuation. The company is reportedly looking to go public in early August.
- Alibaba's revised F-1
- Update: The figures imply calendar Q1 revenue of $1.93B, +39% Y/Y. That represents a big slowdown from the 66% growth reported for Q4.
Wed, Jun. 11, 2:39 PM
- Acquisition-hungry Alibaba (ABABA) is buying the 1/3 of top Chinese mobile browser vendor UCWeb it doesn't yet own for a mixture of cash and stock. The price hasn't been disclosed, but Alibaba claims the deal is the biggest Chinese Web merger in history, exceeding Baidu's (BIDU +0.4%) $1.9B purchase of app store provider 91 Wireless.
- UCWeb has a 50%+ share of the Chinese mobile browser market, and also has 35% of the Indian market. The company claims 500M total browser users, as well as 50M users for its Android app store, which competes against Baidu and Qihoo's (QIHU +3.8%) popular stores.
- More importantly for Baidu (and also relevant for Qihoo), UCWeb claims a 20%+ share of the Chinese mobile search market on the back of 100M active users. A mobile search JV was launched with Alibaba in April.
- Meanwhile, CNBC reports Alibaba will likely file a new F-1 early next week that includes its Q1 results. Odds are Yahoo (YHOO +0.6%), which has been reporting Alibaba's results a quarter in arrears, will move on the numbers.
- CNBC adds Alibaba is still expected to go public in the first week of August. Bloomberg previously reported Alibaba is eying an Aug. 8 IPO.
Wed, May. 14, 2:19 PM
- Tencent (TCEHY +8.4%) trades higher after reporting better than expected Q1 earnings, as net income soared 60% Y/Y to 6.46B and easily beating the analyst consensus estimate of 4.04B yuan.
- Q1 revenues rose 36% Y/Y to 18.5B yuan; online gaming sales jumped 39%, contributing 56% of Tencent’s total revenue.
- Mobile gaming revenue is beginning to make a significant contribution to revenue, with sales soaring 200% Q/Q to 1.8B and representing 17% of Tencent’s total gaming sales, up from 7% last quarter.
- WeChat and QQ, the two messaging programs, claim 396M monthly active users, up 11.5% Q/Q, and the number of monthly active users for Tencent’s instant messaging service is 848M.
- Numbers like these no doubt will help feed the anticipation for Alibaba’s (ABABA) upcoming IPO.
Wed, Apr. 16, 2:22 PM
- "Holy Alibaba!" exclaims Bernstein's Carlos Kirjner after looking at the Q4 numbers disclosed by Yahoo (YHOO +5.7%) yesterday. He now values the Chinese e-commerce giant at $245B - 25x estimated 2016 earnings of $9.5B for its core Taobao and Tmall sites + a $7.5B valuation for Alibaba.com and Alipay. Taobao/Tmall profits are now expected to grow 41% in 2015, and 28% in 2016.
- Wells Fargo and Gabelli have upgraded Yahoo: The latter calls shares "ready for takeoff" as hype surrounding Alibaba's (ABABA) IPO - an F-1 reportedly could arrive by Monday - continues growing.
- Looking at Yahoo itself, UBS (Buy) is pleased with the top-line impact of the company's in-stream ads (now 20% of display ad volume). It's less happy with Yahoo's vague CC remarks (transcript) about the tax impact of Alibaba share sales and future cash returns, EBITDA weakness (due to growth investments), and high headcount.
- SunTrust (Buy) observes rising mobile ad sales (along with in-stream and premium ads) helped display impressions rise 7%, and that the Americas (where new ad products have been launched first) is outperforming.
- Marissa Mayer mentioned on the CC Yahoo's news app is respectively ranked #1 and #2 in the news app category on the App Store and Google Play, that most mobile search metrics rose nearly 100% Y/Y, and that video streams (boosted by the Olympics and recent content deals) rose 30% Q/Q.
Wed, Apr. 16, 4:08 AM
- Alibaba Group (ABABA) could file the prospectus for its U.S. IPO on Monday, Reuters reports, adding that the listing could be worth over $16B.
- The report comes after major shareholder Yahoo (YHOO) disclosed that Alibaba's Q4 net income surged 110% to $1.35B as revenue jumped 66% to $3.06B.
- Alibaba's results helped Yahoo's shares climb 6.8% in AH trading. In Tokyo, shares in SoftBank (SFTBF), which owns 37% in Alibaba, jumped 8.5%.
Tue, Apr. 15, 4:34 PM
- Yahoo (YHOO) discloses in its earnings slides (.pdf) Alibaba (ABABA) had Q4 revenue of $3.06B (+66% Y/Y), and net income of $1.35B (+110%). Revenue growth accelerated from Q3's 51% clip.
- Yahoo Japan's sales fell 14% Y/Y in Q4 to $1.03B (worse than Q3's 4% drop), and its net income fell 11% to $304M.
- Yahoo itself is guiding for Q2 revenue of $1.12B-$1.16B, above a $1.08B consensus. Op. income is expected to fall to $130M-$170M from a year-ago level of $224M, and adjusted EBITDA to $290M-$330M from $386M.
- Yahoo's long-struggling display ad ops staged a turnaround in Q1: Sales (ex-TAC) rose 2% Y/Y to $409M after falling 6% in Q4 and 7% in Q3. Search revenue (ex-TAC) rose 9% to $444M after growing 8% in Q4. All other revenue fell 11% to $234M.
- Display ads sold +7% vs. +3% in Q4, price per ad -5% vs. -7%. Search paid clicks +6%, down sharply from Q4's +17%. But price per click rose 8% after dropping in each quarter of 2013. Did Henrique de Castro's firing contribute to the display/search improvement?
- $450M was spent on buybacks, up from $231M in Q4 and boosting EPS. While revenue rose 0.9% Y/Y, opex rose 15.5% to $1.1B.
- Q1 results, PR
Wed, Jan. 29, 12:07 PM
- Evercore has trimmed its Yahoo (YHOO -7.4%) PT to $39 from $40 in response to Alibaba's (ABABA) weaker-than-expected Q3 revenue. The firm has cut its Alibaba valuation by 5% to $150B, and now gives Yahoo's 24% stake a post-tax value of $22/share.
- Evercore also isn't thrilled with Yahoo's soft Q1 margin guidance and lack of formal full-year guidance, though it is pleased Yahoo's total and mobile active user bases (exc. Tumblr) respectively rose 20% and 60% in 2013 to 800M and 400M. The latter is inflated some by pre-installed iPhone apps that don't feature Yahoo branding or ads.
- Gabelli has cut shares to Hold. Though still giving Yahoo a $42/share sum-of-the-parts valuation, it doesn't see "a sufficient margin of safety" following the company's big 2012/2013 run-up.
- Cantor has upped its PT to $40 from $38, but also observes continues to lose display and search ad share, and says "the clock is now ticking" for Marissa Mayer & Co. to deliver a turnaround. SunTrust remains bullish, upping its PT to $42 from $34 and estimating Yahoo's core business is only being valued at 3x EBITDA.
- Meanwhile, TechCrunch reports Yahoo has acqui-hired enterprise app studio Tomfoolery. All four of the startup's co-founders will be joining Yahoo.
- On the CC (transcript), Mayer admitted Yahoo's mobile revenue "is still not material" relative to the rest of its business, but insisted some of its ad products (Stream ads?) will work better on mobile than PCs.
- Q4 results, guidance/Alibaba's numbers
Tue, Jan. 28, 4:28 PM
- Yahoo (YHOO) guides within its Q4 earnings slides for Q1 revenue (ex-TAC) of $1.06B-$1.1B, in-line with a $1.08B consensus. However, op. income is expected to fall to $130M-$170M from $224M a year earlier.
- Yahoo also reports Alibaba (ABABA) had Q3 revenue of $1.78B, +51% Y/Y (down from Q2's 61%) but only +2% Q/Q. The Chinese e-commerce giant had Q3 net income of $801M, up from $717M in Q2.
- Yahoo Japan had Q3 revenue $1.03B (-4% Y/Y, even with Q2) and net income of $307M (-11%).
- Display ad sales -6% Y/Y in Q4 to $491M after dropping 7% in Q3. Search ad sales +8% vs. +3% in Q3. Americas revenue (76% of total) flat Y/Y, EMEA -3%, Asia-Pac -10%.
- Search paid clicks +17% Y/Y in Q4 vs. +21% in Q3. Price per click -3% vs. -4%. Display ads volume +3% Y/Y vs. +1%, price per ad -7% (unchanged).
- CC at 5PM ET. Q4 results, PR.
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