Alibaba Earnings: Short Term Pain For Long Term Gain

A.J. Button profile picture
A.J. Button
11.69K Followers

Summary

  • Alibaba's Q2 earnings showed a slight miss on revenue and a wide miss on EPS.
  • The earnings miss was due to heavy investments (about $1.6 billion) in new business activities, not poor operating results.
  • Operating income actually jumped 10%.
  • In this article, I reiterate my bullish call on BABA, arguing that the earnings miss was almost entirely due to heavy investments in future growth.

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Alibaba Group Holding (NYSE:BABA) just released its second quarter earnings. Results were nearly in-line on revenue while EPS was a huge miss. In the Q2 earnings release, we saw Alibaba continue to invest massively

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This article was written by

A.J. Button profile picture
11.69K Followers
Financial journalist. Passed CFA Level 1. Seeking value and dividend growth opportunities, and sharing what I find on Seeking Alpha. Follow me on Youtube and Twitter: twitter.com/AJButton2

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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