Alibaba Q4 earnings preview: navigating economic challenges and growth opportunities

When will Alibaba report its latest earnings?

Alibaba Group, China's multinational e-commerce and technology giant, will release its Q4 earnings report on Friday, 15 November 2024 at 10.30pm AEDT, before US markets opens.

The backdrop

Alibaba's outlook remains closely aligned with the trajectory of the Chinese economy and evolving regulatory policies. The upcoming earnings report will provide a critical opportunity for investors to evaluate the economy's growth momentum, particularly following Beijing's recent stimulus measures introduced since late September.

Beyond macroeconomic headwinds, Alibaba also faces significant industry challenges, including intensifying competition, escalating operational and capital expenditures, and ongoing geopolitical uncertainties. These factors could continue to weigh on the company's profitability and growth trajectory.

During the earnings call, investors will gain insight into Alibaba management's strategic initiatives and forward guidance, offering clarity on how the company plans to navigate these complex challenges.

Alibaba's financial highlights for Q1 2025

• Revenue performance

In its most recent quarter, Alibaba achieved total revenues of $33.5 billion, marking a 4% increase year-on-year. However, the core operations of Taobao and Tmall Group reflected some challenges, experiencing a 1% decline year-on-year, in contrast to a 4% growth in the prior quarter.

The International Digital Commerce Group, Alibaba's second-largest segment, witnessed a slowdown in growth, decelerating from 45% in the March quarter to 32% in the June quarter, indicating tempering momentum.

• Strength in Alibaba Cloud

Alibaba Cloud stood out as a significant positive aspect, registering a 6% growth. This was driven by robust double-digit expansion in cloud services and a rising adoption of AI-related products across its platforms. Despite navigating a cautious domestic consumer landscape, Alibaba continues to see positive results in its cloud services, suggesting some resilience within its diverse business portfolio.

Alibaba Q2 2024 segment performance: revenue and EBITA breakdown

Alibaba share prices and analyst rating

The performance of Alibaba's stock on the New York Stock Exchange has been lacklustre in recent years. After peaking above $280 roughly four years ago, the share price has more than halved, hovering around $100 since 2022.

Following Beijing's "stimulus bazooka" announced in late September, Alibaba's share price attained its highest level since January 2023, but it has since relinquished some of those gains. As of the time of writing, Alibaba's shares are trading below $100 again.

Looking ahead, the stock has received strong support from analysts over the past three months. Out of 61 global analysts, 51 have rated it as a buy (including strong buy), while the remaining 10 analysts have a hold recommendation. The one-year price target, based on the estimates of 51 analysts, is $118.79, indicating a 29% potential upside from the closing price on 12 November 2024.

Analyst consensus and price target forecast (2023-2025)

Alibaba technical analysis

From a technical perspective, the brief bounce since late September has clearly given way to further downside as concerns over the Chinese economy persist. The stock is currently testing the price gap created at the start of the recent rally (between $90.01 and $94.55), which may offer some near-term support. However, a breach below this gap could open the floor for further downside, potentially targeting $81.85, where the 200-day simple moving average (SMA) is currently positioned.

On the flip side, buyers will need a close above $96.77 to gain confidence that a recovery attempt is underway.

Alibaba daily chart