Alibaba's Monetization Strategy Gains Momentum, But GMV Growth Lags: Analyst

Benzinga11-19

Benchmark analyst Fawne Jiang maintained a Buy rating on Alibaba Group Holding (NYSE:BABA) with a price target of $118. Jiang remarked that Alibaba’s latest earnings report was a mixed bag, offering ...

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While customer management revenue  grew by 2.5% year-over-year in the second quarter, slightly surpassing expectations, general merchandise volume  showed only modest growth.Also Read: Alibaba Eyes Raising $5 Billion Via Bond Sale to Fund Debt Payoff and Stock Buybacks. Jiang anticipates better monetization in upcoming quarters, supported by the introduction of software service fees and increased use of the Quanzhantui marketing tool. However, subdued GMV growth raises questions about Alibaba’s ability to maintain its market share amid rising competition.Alibaba’s second-quarter fiscal 2025 revenue reached 236.5 billion Chinese yuan, a 5% increase year-over-year but falling short of consensus estimates of 239.4 billion Chinese yuan. Adjusted EBITDA totaled 47.3 b","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0348814723.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"A\" (USD) INC  NC","LU1048596156.SGD":"Blackrock Asian Growth Leaders A2 SGD-H","BK4502":"阿里概念","LU1152091754.HKD":"UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) \"PM\" (HKD) INC","BK4505":"高瓴资本持仓","LU1008478684.HKD":"UBS (LUX) EQUITY FUND -  CHINA OPPORTUNITY \"P\" (HKD) ACC","09988":"阿里巴巴-W","LU1688375341.USD":"贝莱德中国灵活股票基金","LU1282648689.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AMG\" (USD) INC","LU0797268264.HKD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT\" (HKD) ACC","BK4504":"桥水持仓","AIQ":"Global X Future Analytics Tech ETF","LU1046421795.USD":"富达环球科技A-ACC","BK4548":"巴美列捷福持仓","BK4565":"NFT概念","LU0918141887.USD":"安联亚洲实际收益股票基金","LU1880383366.USD":"东方汇理中国股票基金 A2 (C)","HBBD.SI":"Alibaba HK SDR 5to1","IE00BFMHRM44.USD":"NEUBERGER BERMAN GLOBAL EQUITY MEGATRENDS \"A\" (USD) ACC","LU1051768304.USD":"贝莱德新兴市场股票收益A6","LU0348816934.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT\" (USD)","BK4554":"元宇宙及AR概念","LU1046422090.SGD":"Fidelity Pacific A-SGD","LU0251143458.SGD":"Fidelity Emerging Markets A-SGD","BK4531":"中概回港概念","LU1515016050.SGD":"Blackrock Emerging Markets Equity Income A6 SGD-H","BK4534":"瑞士信贷持仓","LU0880133367.SGD":"UBS (LUX) EQUITY FUND CHINA OPPORTUNITY USD \"P\" (SGD) ACC","LU0501845795.SGD":"瑞银大中华区股票基金P Acc SGD","BK4533":"AQR资本管理(全球第二大对冲基金)","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","IE00B0JY6N72.USD":"PINEBRIDGE GLOBAL EMERGING MARKETS FOCUS EQUITY \"A\" (USD) ACC","BK4575":"芯片概念","BK4587":"ChatGPT概念","BABA":"阿里巴巴","LU2226246903.HKD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT4\" (HKD) ACC","BK4220":"综合零售","BK4524":"宅经济概念","BK4535":"淡马锡持仓","LU0072913022.USD":"UBS (LUX) EQUITY FUND -  GREATER CHINA \"P\" (USD) ACC","BK4527":"明星科技股","BK4538":"云计算","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4588":"碎股","BK4526":"热门中概股","BK4579":"人工智能","BK6130":"综合零售","LU0067412154.USD":"UBS (LUX) EQUITY FUND -  CHINA OPPORTUNITY \"P\" (USD) ACC","LU1105468828.SGD":"Allianz Total Return Asian Equity AM DIS H2-SGD","BK4122":"互联网与直销零售"},"translate_title":"分析师：阿里巴巴-SW货币化战略势头强劲，但GMV增长滞后","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AIQ":1,"BABA":1,"HBBD.SI":0.9,"09988":0.6},"content_text":"Benchmark analyst Fawne Jiang maintained a Buy rating on Alibaba Group Holding (NYSE:BABA) with a price target of $118.\nJiang remarked that Alibaba’s latest earnings report was a mixed bag, offering encouraging signs and areas of concern. While customer management revenue (CMR) grew by 2.5% year-over-year in the second quarter, slightly surpassing expectations, general merchandise volume (GMV) showed only modest growth.\nAlso Read: Alibaba Eyes Raising $5 Billion Via Bond Sale to Fund Debt Payoff and Stock Buybacks\nJiang anticipates better monetization in upcoming quarters, supported by the introduction of software service fees and increased use of the Quanzhantui marketing tool. However, subdued GMV growth raises questions about Alibaba’s ability to maintain its market share amid rising competition.\nAlibaba’s second-quarter fiscal 2025 revenue reached 236.5 billion Chinese yuan, a 5% increase year-over-year but falling short of consensus estimates of 239.4 billion Chinese yuan. Adjusted EBITDA totaled 47.3 billion Chinese yuan, exceeding expectations of 46.9 billion Chinese yuan.\nNotably, growth varied across segments: Taobao and Tmall Group grew by 1%, international digital commerce surged by 29%, local services rose by 14%, Cainiao logistics increased by 8%, and cloud services were up 7%. Digital media and entertainment dipped by 1%, while other segments grew by 9%.\nThe volatility in GMV growth reignited debates over Alibaba’s ability to defend its market position effectively. Despite management’s optimism about solid performance during the Double 11 shopping event, the decline in TTG’s EBITDA margin—down 3.2 percentage points year-over-year—signals heavy investments in diversifying supply and improving customer experience.\nJiang expects a gradual recovery, aided by consumption growth and new user acquisition via channels like WeChat Pay. Additionally, reductions in losses from non-core assets could offset margin pressure at the group level.\nJiang revised Alibaba’s fiscal 2025 and fiscal 2026 revenue estimates downward to 996 billion Chinese yuan (prior 998 billion Chinese yuan) and 1,083 billion Chinese yuan (1,089 billion Chinese yuan prior), respectively, due to a focus on improving profitability over rapid growth.\nThe analyst adjusted the fiscal 2025 EBITDA forecast to 198 billion Chinese yuan from a previous estimate of 205 billion Chinese yuan, factoring in increased investment in Taobao and Tmall Group (TTG).\nThe fiscal 2026 EBITDA projection remains essentially unchanged at 222 billion Chinese yuan.\nJiang’s price target of $118 reflects an 11.5x multiple of the projected fiscal 2025 adjusted EPS of $8.07, plus net cash per share of $24.27.\nAlibaba Group Holding stock has gained over 18% year-to-date. Investors can gain exposure to the stock through Avantis Emerging Markets Equity ETF (NYSE:AVEM) and Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ).\nPrice Action: BABA stock is up 0.36% at $88.91 at the last check on Monday.\nAlso Read:\n\nStratasys CEO Touts Turnaround: Strong Market Gains, Cost Cuts Drive Q3 Beat, Guidance Raised\n\nPhoto via Wikimedia Commons\nLatest Ratings for BABA\n\n\n\nDate\nFirm\nAction\nFrom\nTo\n\n\n\n\nFeb 2022\nBarclays\nMaintains\n\nOverweight\n\n\nFeb 2022\nStifel\nMaintains\n\nBuy\n\n\nFeb 2022\nCitigroup\nMaintains\n\nBuy\n\n\n\n View More Analyst Ratings for BABA \n View the Latest Analyst Ratings \nUp Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market.\nGet the latest stock analysis from Benzinga?\n\nALIBABA GR HLDGS (BABA): Free Stock Analysis Report\n\nThis article Alibaba's Monetization Strategy Gains Momentum, But GMV Growth Lags: Analyst originally appeared on Benzinga.com\n© 2024 Benzinga.com. Benzinga does not provide investment advice. 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