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.