Interesting Alibaba (BABA) Earnings Call Takeaway - Nomura

Nomura/Instinet analyst Jialong Shi reiterated a Buy rating and $215.00 price target on Alibaba (NYSE: BABA) after the company reported an impressive 2Q20 with Total Revenues up +40% y/y and 2% above consensus estimates and adjusted EBITA up 39% y/y.

The analyst stated "One key highlight from the earnings call was that Ali is prepared to reinvest the discretionary profit generated from the China marketplace based core commerce business to strategic areas if needed, while management will target to continue improving cost efficiency. Ali management did not elaborate how the investments will be allocated across various strategic segments. However, we believe the lower-tier ecommerce market is likely the key focus of investment in 2HFY20, in particular during the December quarter since the lightening expansion of Pinduoduo (PDD US, Neutral) in the lower-tier markets is a risk to Ali’s core ecommerce business".

For an analyst ratings summary and ratings history on Alibaba click here. For more ratings news on Alibaba click here.

Shares of Alibaba closed at $179.16 yesterday.

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