5 Most Awaited Earnings to Watch in August

3. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 100

Alibaba Group Holding Limited (NYSE:BABA) will announce its fiscal first-quarter results before the opening bell on Thursday, August 4, 2022. However, Alibaba stock has been losing value ahead of its earnings.

The stock plummeted over 11 percent on Friday, July 29, 2022, as analysts expect the Chinese e-commerce giant’s profit and sales to drop on a year-over-year basis. Alibaba Group Holding Limited (NYSE:BABA) is expected to earn $1.52 per share on revenue of $30.05 billion. That’s down from earnings of $2.57 per share on revenue of $32.37 billion reported by Alibaba Group Holding Limited (NYSE:BABA) for the comparable period of 2021.

Separately, investment management firm Artisan Partners mentioned Alibaba Group Holding Limited (NYSE:BABA) in its second-quarter 2022 investor letter, stating:

“Alibaba rose 4% during the quarter. We would love to say the share price performance was due to strong operational performance. Unfortunately, that was not the case. The most recent earnings results showed its core e-business still had not returned to growth, primarily due to the difficult retail environment caused by the government’s zero-COVID policy. Alibaba also appears to be losing market share due to its product mix tilted toward apparel and cosmetics, categories currently stalled in this environment. The share price performance this quarter was largely a function of exogenous items—specifically, government actions in the form of stimulus to support the economy and less regulations.

Despite the poor recent results, Alibaba remains a powerful economic engine. It is a global leader in e-commerce and cloud computing, both of which should grow nicely over time. Management has started taking actions to improve profitability, which has been burdened by significant investment in loss-making business ventures. The financial results should improve significantly when China’s economy starts to recover from COVID-19 outbreaks. The shares are incredibly cheap and have some of the highest upside potential in the portfolio. Even embedding significant losses from new ventures, we estimate they are trading at 11X-12X unlevered earnings. In our view, the shares could double, and they still would not be expensive.”