To The Moon

$Alibaba(BABA)$ is scheduled to report results for its fiscal third quarter on 07 Feb 2024 before market opened. Net profit for the quarter ended 31 Dec is expected at 36.99 billion yuan (US$5.15 billion), according to a FactSet poll of analysts. That would be down from a bottom line of CNY46.81 billion a year ago and up from CNY27.71 billion in the fiscal second quarter. Revenue is expected at CNY261.34 billion, according to the FactSet poll, up from CNY247.76 billion a year earlier and CNY224.79 billion in the fiscal second quarter. Alibaba’s revenue numbers will be watched closely by investors as it provide a gauge to how well Alibaba have manage to navigate a slowing economy and fierce competition. Another area which will affect the revenue is how effective is the personnel and structural changes, aimed at boosting revenue, affecting the business. Alibaba's international commerce business has been one of its fastest-growing units in the past few quarters. But there might be doubt of how this business have performed since Alibaba decide to withhold sales figure for 2023 Singles’ Day, this could indicate that 2023 performance may not have met anticipated levels. This could be attributed to the economic deceleration and consumer caution, leading to reduced spending on non-essential products. Continued flat growth was expected in 2023, as evidenced by a Bain/Toluna survey showing that 77% of consumers had no intention of increasing their spending. Singles' Day has not garnered significant momentum in Western markets, especially when compared to established shopping events like Black Friday and Cyber Monday. However, due to the vast Chinese consumer base, Singles' Day has the potential to drive sustained industry-wide sales. Alibaba (BABA) Last Reported Earnings BABA last reported earnings on 16 Nov before the market opened (BMO). BABA shares declined -9.1% the day following the earnings announcement to close at 78.06. Following its earnings release, 82 days ago, BABA stock has drifted -4.4% lower. From the time it announced earnings, BABA traded in a range between 66.63 and 78.65. The last price (74.63) is closer to the higher end of range. Estimated implied straddle for upcoming earnings is 6.3%. We could be seeing another negative price effect as revenue and earnings should be lower than expected. Alibaba also has the cost of its restructuring which should take a cut from the revenue. Alibaba (BABA) Post Earnings Movement The options market overestimated BABA stocks earnings move 67% of the time in the last 12 quarters. The predicted move after earnings announcement was ±6.4% on average vs an average of the actual earnings moves of 5.6% (in absolute terms). This suggest that we are looking at price volatility as option valuation is overvalued, we could see at least a negative 1 per cent move after the earnings result. Alibaba (BABA) Earnings Implied Volatility Crush BABA's last earnings implied volatility (IV30) going into earnings was 40.1. The last time BABA released earnings, the implied volatility dropped to 33.2, resulting in an implied vol crush of 17%. 5 days after earnings, the 30 day IV was 31.0. Average Implied Volatility Crush For BABA Earnings: 9% Average 30 Day Implied Volatility 1 Day Before Earnings: 52.2 Average BABA 30 Day IV for the Day of Earnings: 47.5 Average 30 Day Implied Volatility 5 Days After Earnings: 44.5 Summary Based on market expectation, we should be seeing a lower revenue and earnings reported, with flat growth expected for Alibaba biggest market, we should not be expecting any surprise earnings. The most important event in November, Alibaba might not have make a very impressive sales performance as we do not know exactly how well was the sales and revenue. Based on how BABA have been trading. it is trying to get out of the downside, but it does not seem to have much success. Today (06 Feb), it has a good more than 4% increase due to China’s stimulus, but Alibaba need to resolve its underlying challenges. Appreciate if you could share your thoughts in the comment section whether you think Alibaba could surprise us with a strong revenue and earnings per share? @TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts. Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.