Alibaba earnings report: key insights and analysis for Q3 2023
Discover the critical factors shaping Alibaba's performance and its journey through regulatory challenges and AI development as it releases its Q3 2023 earnings.
Alibaba earnings date
Alibaba Group will announce its results for the September quarter on November 16, 2023, at 22:00 pm AEDT.
Alibaba earnings expectations
|
September Quarter |
June Quarter |
YOY |
EPS($) |
$2.12 |
$2.17 |
17% |
Revenue ($) |
$30.79B |
$32.29B |
6% |
Source: Alibaba
Key points to watch
Alibaba's journey out of its prolonged winter seems to be bumpier than initially anticipated. After enduring three years of a stringent regulatory clampdown by the Chinese government, the tech giant was expected to rejuvenate this year.
In the June quarter, Alibaba delivered robust results, with a 14% year-over-year increase in revenue, totaling RMB 234,156 million (US$32,292 million). Its income from operations surged by 70%, accompanied by exceptional cash flow: net cash flow provided by operating activities increased by 34%, and free cash flow saw a remarkable 76% increase.
Challenges amid a strong financial performance
Despite its strong financial performance in the past quarter, Alibaba has encountered significant challenges since the third quarter of the year. These challenges primarily stem from an unexpectedly softening domestic consumer market in China. The world's second-largest economy entered deflation territory in July, with producer prices experiencing a continuous decline for 13 consecutive months until October.
Indeed, the 20% decrease in Alibaba's share prices over the past three months reflects global investors' fragile confidence in the Chinese e-commerce giant. It is evident that investors remain skeptical about Alibaba's recovery trajectory moving forward.
Softening domestic market
Beyond its financial performance, a critical aspect to monitor is Alibaba's progress in AI development. Just two weeks ago, on October 31st, Alibaba launched the latest version of its artificial intelligence model, a significant development aimed at competing with its US counterparts such as Amazon and Microsoft.
Deflation and share price decline
As the leading cloud player in China by market share, Alibaba's potential expansion into the global market with its leading AI and Cloud capabilities could mark the beginning of a new era for the Chinese tech giant, provided it achieves success.
Technical analysis
Turning to the weekly chart of Alibaba, following last week's retracement, the stock price has reached a crucial support level at $77-$80. Given that the price is currently trading below all its short-term and long-term trendlines, sellers may exert pressure on the current support level, potentially sending the price to revisit its 12-month low at $74.
On the flip side, only a breakout from the January to October downward trendline could assist the bulls in staging a comeback, with overhead resistance located at $89-$90. Further clearance of the 100-day MA could usher in a rally toward the July highs near the $97-$100 handle
Alibaba weekly chart
Alibaba stock rating and IG sentiment
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