Alibaba share price trades higher despite expected earnings drop

Key takeaways

1. Alibaba will release results on the 14th of May 2024
2. Revenue is expected slightly higher than in the prior year’s comparative period
3. Earnings per share are expected lower than in the prior year’s comparative period
4. The long term consensus of analyst ratings on the stock is a buy
5. In the near term we have see the stock price breaking range resistance

When are the Alibaba results expected?

Alibaba, is set to release fourth quarter (end March) results for the fiscal year 2024 on the 14th of May 2024.

What is ‘The Street’s’ expectations for the Q4 results?

‘The Street’ expectations for the upcoming results are as follows:

• Revenue of $30.48 billion in Q4 2024 (vs Q4 2023 revenue of $30.32 billion)
• Earnings per share $1.42 (vs EPS of $1.46 in Q4 2023)

While revenue for the quarter is expected to increase marginally year on year, earning’s margins are likely to be negatively affected by the groups low pricing initiatives aimed at supporting increased volumes amidst a growing competition in the e-commerce space.

How to trade Alibaba into the results

Based on 47 analysts surveyed by Refinitiv, offering 12 month price targets for Alibaba, the average price target is US$106.43. The average price target represents a 33% change from the last price traded as of the 13th of May 2024.

Alibaba Group (US listed ADR) – Technical view

The stock price of Alibaba has recently broken out of a trading range between levels 68.30 (support) and 77.30 (resistance).
The upside breakout also now sees the price trading above the 200-day simple moving average (200MA) (blue line). This suggests that the long term down trend has now been broken.

The upside breakout sees 87.65 as the next resistance target from the move. Traders who are long might consider using a close below either the 79.00 or 77.30 support levels (depending on risk threshold) as a stop loss indication.