BABA Stock Jumps As Quarterly Earnings Beat

China bellwether stock Alibaba (BABA) reported quarterly results early Thursday that beat earnings and revenue estimates, driven by better-than-expected sales in China’s domestic e-commerce market. BABA stock jumped.

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Alibaba reported adjusted earnings of $1.55 a share on revenue of $32.2 billion. Analysts expected Alibaba to report adjusted income of $1.07 a share on revenue of $29.9 billion. Results were for its fiscal fourth quarter ended March 31.

“Revenue climbed 9% from the year-ago period, primarily driven by the revenue growth of the China commerce segment,” the company said in its earnings release.

BABA stock jumped 14% to 93.70 during morning action on the stock market today.

Shares Hammered The Last Few Years

Shares of Alibaba, like almost all China internet stocks, have been hammered the past two years. Factors in the downfall include a strict regulatory environment, economic weakness, Covid shutdowns, supply-chain issues, inflation and more.

“Despite macro challenges that impacted supply chains and consumer sentiment, we continued to focus on customer value proposition and building the capabilities to deliver value,” Chief Executive Daniel Zhang said in written remarks. “We saw tangible progress across our businesses, especially in operational improvements in key strategic areas.”

As a sign of confidence in its performance, Alibaba recently announced it would increase its buyback program to $25 billion from $15 billion. In addition, it has already bought back 56.2 million shares for $9.2 billion.

BABA Stock: Clear Sign It’s Inexpensive?

“This was a very deliberate sign from the company they believe their stock is inexpensive,” Baird analyst Colin Sebastian said in a note to clients this week. He has a rating of outperform on BABA stock with a price target of 144.

“Alibaba’s stock price does not fairly reflect the company’s value given our robust financial health and expansion plan,” Alibaba Chief Financial Officer Toby Xu said in written remarks when the company announced its buyback plan.

The Alibaba earnings report follows that of e-commerce competitor JD.com (JD). On May 17, JD reported first-quarter results that beat revenue expectations despite China lockdowns. JD ended the first quarter with 580.5 million active annual customers, up 16%

“Looking ahead,” said Zhang, “we will continue to execute on our multi-engine growth strategy by strengthening our digital infrastructure and focusing on quality growth to create long-term value for our customers, shareholders and other stakeholders across our ecosystem.”

BABA stock trades near a six-month low.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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