Alibaba Group Holding Ltd (NYSE: BABA) stock traded higher by 1 percent on Thursday morning after the company reported a big fiscal second-quarter earnings beat and raised its full-year guidance.
Despite Alibaba’s massive size and position as the largest e-commerce company in China, Alibaba reported its largest year-over-year revenue growth as a public company.
Alibaba reported adjusted earnings per share of $1.29 on revenue of $8.28 billion. Both numbers topped consensus analyst estimates of $1.04 and $7.87 billion, respectively. Alibaba’s revenue was up 61 percent compared to that same quarter a year ago.
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Alibaba also raised its full-year revenue growth guidance from a previous range between 45 and 49 percent to a new range between 49 and 53 percent.
Cloud computing revenue increased by 99 percent from a year ago to $447 million.
Operating margin was 30 percent.
Alibaba reported 488 million active users for its retail marketplaces and said its core commerce revenue grew 63 percent on the quarter. Alibaba also added 20 million mobile active users to bring its user count to 549 million.
Alibaba said it is seeing positive early results from its push into physical retail as part of its omnichannel retail initiative. U.S. rival Amazon.com ( AMZN) has also embraced the omnichannel retail approach via its buyout of Whole Foods Market.
“The margins were better than expected,” Haitong International Securities analyst Billy Leung said, according to Bloomberg. “It’s definitely a positive for the company.”
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Despite the fact that Alibaba stock is up more than 110 percent in 2017, HSBC analyst Chi Tsang said last month that Alibaba is still a solid value for investors given its staggering growth and relatively modest 2019 projected earnings multiple of about 25.
“Alibaba has valuable data assets on its consumers that it can leverage to increase value to both its brands and buyers, resulting in high monetization and margins,” Tsang writes. “Second, it is the thought leader in China retail and its New Retail concept sets the stage for long-term value creation.”
HSBC has a “buy” rating and $204 price target for Alibaba stock.
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Record Revenue Growth for Alibaba Group Holding Ltd (NYSE: BABA) originally appeared on usnews.com
