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BABA Stock Jumps As Quarterly Earnings Beat

China bellwether stock Alibaba (BABA) reported quarterly results early Thursday that beat earnings and revenue estimates. BABA stock jumped.


The China e-commerce company reported adjusted earnings of $1.55 a share on revenue of $32.2 billion. Analysts expected Alibaba to report adjusted income of $1.07 a share on revenue of $29.9 billion. Results were for its fiscal fourth quarter ended March 31.

BABA stock jumped 10.5% to 90.92, during morning trading on the stock market today.

Shares of Alibaba, like almost all China internet stocks, have been hammered the past two years. Factors in the downfall include a strict regulatory environment, economic weakness, Covid shutdowns, supply-chain issues, inflation and more.

Baird analyst Colin Sebastian this week lowered estimates on BABA stock.

“We recognize there is some optimism that the operating environment for Internet companies in China may be normalizing, and if that proves accurate, we believe there could be material upside in shares over the long term,” Sebastian wrote in a note to clients. “For now, however, we think management’s tone could remain cautious with respect to near-term growth and margins.”

BABA Stock: Showing Confidence With Buyback?

As a sign of confidence in its performance, Alibaba recently announced it would increase its buyback program to $25 billion from $15 billion. In addition, it has already bought back 56.2 million shares for $9.2 billion.

“This was a very deliberate sign from the company they believe their stock is inexpensive,” Sebastian wrote. He has a rating of outperform on BABA stock with a price target of 144.

“Alibaba’s stock price does not fairly reflect the company’s value given our robust financial health and expansion plan,” Alibaba Chief Financial Officer Toby Xu said in written remarks when the company announced its buyback plan.

Thursday’s Alibaba earnings report follows that of e-commerce competitor (JD). On May 17, JD reported first-quarter results that beat revenue expectations despite China lockdowns. JD ended the first quarter with 580.5 million active annual customers, up 16%

BABA stock trades near a six-month low.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.


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