While everyone is glued to their sets, hoping that James Comey says some outlandish shit, Jack Ma from BABA is finally getting his due on Wall Street. The stock has exploded to the upside after providing much better than expected guidance on what they call ‘investor day’ — saying sales will increase by a staggering +45-49%. This is having a rapish effect on the portfolios of those short BABA, but it’s also boosting ancillary China plays — like BZUN, JD and even YHOO.
Needham weighs in.
Needham raises their BABA tgt to $155 from $140. Firm feels the highlight of the first day of Alibaba’s 2017 Investor Day was FY18 rev growth guidance above expectations. Co’s CFO provided rev growth guidance of 45-49% y/y growth, which was above consensus rev growth of 37%. This is an acceleration from FY17 growth of 44% growth excluding acquisitions. Mgmt expects core China Commerce growth to be the primary growth driver as Alibaba leverages its data assets to lift consumer engagement, driving more traffic to merchants and raising conversions. Given the higher than expected rev growth firm is raising their FY18 rev, EPS, and EBITDA ests.
Personally, the numbers at “the Chinese Amazon” have always been so good, they reminded me of a scam. Perhaps this is the turning point for Jack Ma’s street cred on Wall Street, not that he gives a shit since BABA is already a giant. Nevertheless, there aren’t any companies out there, the size of BABA, growing at +45-49%. Zero.
The stock is likely going to continue much higher, barring an overall market correction.If you enjoy the content at iBankCoin, please follow us on Twitter