Alibaba Q4 2024 earnings preview: implications for the Chinese economy

When is Alibaba reporting?

Alibaba is expected to report its fourth-quarter (Q4) 2024 earnings on Wednesday, 12 February at 10.30pm AEDT, before the market opens.

Company backdrop

Alibaba is a Chinese multinational conglomerate. It specialises in e-commerce, retail, internet, and technology. The company operates online marketplaces such as Alibaba.com and Tmall. These platforms offer business-to-business (B2B) and business-to-consumer (B2C) services, respectively.

Additionally, Alibaba provides cloud computing services through Alibaba Cloud, digital payment solutions through Alipay, and engages in logistics, media, and entertainment.

Q4 2024 earnings expectations

• Revenue: $39.15 billion
• Diluted earnings per share (EPS): $2.75

Highlights from the previous quarter

Regarded as a barometer for the Chinese economy, Alibaba’s third-quarter (Q3) 2024 results did not meet expectations due to tepid growth and limited stimulus measures in China, impacting consumer spending.

• Revenue: $33.7 billion, an increase of 5% year-over-year (YoY)
• Net income: $6.25 billion, attributable to ordinary shareholders
• Net income growth: 58% YoY
• Diluted EPS: $2.15, a decrease of 4% YoY.

Eddie Wu, Chief Executive Officer (CEO) of Alibaba Group, stated, ‘This quarter, we invested in user experience and strengthened product offerings. Our long-term collaborations in payment and logistics on Taobao and Tmall platforms are set to boost growth. Cloud business growth accelerated, with public cloud and AI-related product revenues seeing significant increases.’

Alibaba sales revenues chart

What to watch for

• China's economic growth

Alibaba's future performance is closely tied to the Chinese economy and evolving regulatory policies. The upcoming earnings report will be crucial for investors to assess China’s economic growth momentum and determine the need for additional stimulus, especially considering potential United States (US) tariffs.

• Industry issues

In addition to macroeconomic challenges, Alibaba faces significant industry issues, including heightened competition and rising operational and capital expenses. These factors could influence the company's profitability and growth trajectory.

Share price targets

The average one-year share price target from 47 analysts is $120.35, suggesting a 35% increase from the closing price of $89.99 on 27 January 2025.

Alibaba analysts' forecasts chart

Alibaba technical analysis

Alibaba’s share price dropped over 80% from its high of $319.32 in November 2020 to a low of $58.01 in October 2022.

Since then, it has traded within a range of $125 to $65. A better-than-expected earnings report may push the share price towards the upper range of $120 - $125.

Conversely, if the earnings report is disappointing, there is trend line support at $70 - $65. Below this, there is uptrend support at $60 - $58, originating from the October 2022 low.

Alibaba weekly chart

• _{Source: Tradingview. The figures stated are as of 29 January 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}