Alibaba to Announce Q4 2019 Earnings: Will the US-China Trade War Affect Revenue?

Alibaba expected to post $0.98 per share on $13.42 Bn revenue for the fourth quarter of 2019.

Alibaba Group, a Chinese multinational conglomerate specializing in e-commerce, retail, Internet and technology, is ready to soon post its earnings and revenue for the fourth quarter of fiscal 2019. Some of the investors showing concerns about the increasing trade war between China and the US have maintained a distance from Alibaba and other Chinese companies. This could be one of the negative factors that Alibaba needs to deal with to ensure strong growth in the global market. According to market analysts, Alibaba’s stock is below its consensus price target of $207 by approximately 20%, considering its current price of $170. Nevertheless, Alibaba could still be a remarkable opportunity for investors, taking into account its estimated 55% share of the China e-commerce market.

Alibaba’s earnings report for Q4 2019 and its guidance will unveil the level of faith that investors can afford to put in the company and the confidence the company has in its latest investments in IoT, machine learnings, and AI. Not to forget, the company has made aggressive advancement into several markets other than consumer products. Its cloud division is also expected to put a positive impression on investors.

Alibaba’s digital payments platform could have strongly contributed to Q4 2019 results

Market analysts project Alibaba to announce earnings of $0.98 per share on $13.42 Bn revenue for Q4 2019. This is more than what the company posted in the same quarter of the previous year, i.e. $0.83 per share on $8.92 Bn revenue. If full-year earnings are to be estimated, market analysts expect the company to announce 13.7% Y-o-Y increase to $5.39 per share. On the other hand, the company is predicted to post revenue of $54.97 Bn for the full year, showing a Y-o-Y growth of 52.4%.

Market analysts will be particularly focusing on Alibaba’s largest segment Core Commerce during the announcement of the Q4 2019 results. In the same quarter of the previous year, this segment showed a Y-o-Y growth of 40%. In addition, investors and stakeholders will be looking for strong assurance from the company about its sustenance amid the slowdown of the Chinese economy and the battle of tariffs between China and the US. Moreover, they will closely watch the company’s innovation initiatives, and digital media and entertainment business that achieved a double-digit growth. AliPay is expected to have made a telling contribution to the company during the fourth quarter.

In Q3 2019, the number of Alibaba’s annual active buyers touched 699 Mn. It will be interesting to see if this trend continued in the fourth quarter. The company is also confident about the long-term trends of its cloud business, which grew at a high rate a year ago.