Alibaba (BABA) PT Raised to $125 at Needham & Company
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Needham & Company analyst Kerry Rice reiterated a Buy rating and lifted his price target on Alibaba (NYSE: BABA) to $125.00 (from $105.00) ahead of Sept quarter results, which he sees coming in in-line with estimates.
Rice commented, "We expect BABA to report in-line revenue and EBITDA for Sep-16 quarter (F2Q17). China Commerce should continue to account for the majority of revenue and EBITDA. We expect strong GMV growth and continued take rate improvement to power China Commerce revenue growth of 42% y/y and EBITDA margin of over 60%. We believe International growth and the contribution from Digital Media and Entertainment could deliver revenue upside. However, the contributions from Lazada and Youku, as well as continued heavy investing in Tmall Supermarket and local services should weigh on margins. We estimate continued triple-digit growth for Cloud Computing. While modestly lowering our revenue, we are raising our EPS estimates to better reflect Alibaba's cost structure and non-cash expenses. We are raising our PT to $125."
Shares of Alibaba closed at $103.93 yesterday.
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