Shares of Chinese e-commerce company Alibaba Group Holdings Ltd. (NYSE:BABA) jumped by 5.41% during the after-hours trading on Wednesday prior to the release of their quarterly earnings report. Back in June, the company forecasted that their annual revenue would rise by almost 50% by next year along with also a bright outlook for the upcoming earnings report.
Earnings Report
For the quarter that ended last June, Alibaba posted a jump of around 56% in their revenue to $7.4 billion or 50.1 billion yuan topping most estimates of 47.7 billion yuan.
Alibaba’s net income also came twice as high to $2.07 billion surpassing most analyst expectations. The company originally forecasted that their revenue would rise annually by around 45% to 49%.
Prior to the release of the company’s earnings report, analysts have upgraded their individual ratings on the stock with price targets reaching as much as $175. Alibaba shares then were trading at around $159. According to analysts, the massive growth opportunity in China given its population offers Alibaba a lot of room for growth.
Alibaba’s revenue from its cloud business jumped by 96% during the quarter alone driving in around 2.4 billion yuan from over one million customers. Last year, Alibaba’s counted paying customers stood at around 577,000 for the same period. The company’s entertainment business revenue also jumped by 30% to 4 billion yuan.
Just most recently, Alibaba has been one of the company’s to be caught in between the attempt of the Chinese regulator’s crackdown to clean the internet. Other companies such as Baidu and Tencent who also offer news services are also being investigated by the Chinese government.
Alibaba has been boosting its operations lately starting with massive data collection and analysis to improve their overall services and reach all over Southeast Asia.
Last year, the company’s revenue has risen by 56% largely attributed to their acquisition of Lazada. Not including revenue from the acquisition, the company’s revenue growth stands at around 45%. Alibaba’s e-commerce sector remains to be the company’s core business. CEO Jack Ma has also been recently trying to get more vendors to use Alibaba’s platform to sell their products. Due to China’s population, the offer attracts numerous foreign businesses who found it hard to tap into the Chinese market.
Shares Jump
Alibaba shares jumped by as much as 5.40% during the pre-market trading on Thursday on their quarterly earnings beat. The stock of the company has already rallied by more than 80% this year alone largely supported by huge earnings beat, strong growth outlook, and the booming e-commerce business. Alibaba shares jumped by 12% last June after the company offered a bright annual revenue growth next year. Alibaba’s stock was expected to jump by around 13% after the release of its quarterly earnings due to an upbeat growth outlook.