The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Alibaba shares need something good to arrest the slide in their price, which has seen the stock drop by almost 14% since its mid-November peak.
Fortunately, fiscal Q3 earnings might provide that good news. Gross merchandise value (GMV), a key metric for Alibaba, and essentially a sales benchmark, is forecast to be strong for the period in question thanks to a good performance over the Singles Day holiday in China. Combined with increasing market share in China, this bodes well overall for earnings.
Competition for market share is strong in Alibaba’s home market, but in recent quarters the company has managed to maintain an edge over rivals. Not only this, but the firm has succeeded in keeping margins at a very healthy level, at 54.4% for profit margins and 48.1% for earnings margins.