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“It has been a while since BABA delivered an all-around clean quarter beating consensus expectation on both revenue and profitability by a large margin,” the analysts said in a note to clients.
They highlighted that Alibaba’s new “consumer-centric approach has started bearing early fruit” as the company undergoes “a fundamental turnaround.”
“The company is approaching an inflection point to get incrementally competitive in value-for-money categories, which helps to strengthen their LT growth outlook for its core Taobao Tmall Group,” they added.
“Furthermore, multiple strategic assets (international retail, Cainiao and local services) are back on high growth trajectory with a notable improvement on profitability profile. We believe a sustainable higher margin profile warrants earnings upward revision and a rerating on the stock,” the analysts concluded.
The analyst has a Buy rating and a $180 per share price target on BABA stock. Based on pre-market price of $97.25, the price target indicates an 85% upside.
