Alibaba (BABA): All Metrics Above Consensus; Raising PT - Needham
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Needham & Company analyst, Kerry Rice, reiterated his Buy rating on shares of Alibaba (NYSE: BABA) after reporting strong June quarter results with all metrics above consensus estimates. The analyst is encouraged that the company has transitioned to a mobile-first platform, with nearly all active users on mobile, 75% of GMV was generated from mobile and the mobile take rate surpassed the desktop take rate for the first time.
Looking ahead, the analyst expects core to continue driving the majority of revenue as Alibaba leverages its data asset to enable merchants to serve more personalized marketing and branding campaigns and the integration of social features to lift consumer engagement. While profitability should remain high compared to its peers, continued investment in its Cloud Computing business and innovative businesses should weigh on EBITDA.
The price target of $105.00 is up from $95, based on 25x CY16E EV/adjusted EBITDA.
Shares of Alibaba closed at $91.77 yesterday.
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