Investing

Earnings Previews: Alibaba, Nikola, Under Armour

The week just ending saw earnings reports from all five of the largest (by market cap) U.S.-based companies. All five are tech giants, and only one (Amazon) staggered a bit.

In the week of August 2, we shall be getting June-quarter results from several oil and gas exploration and production companies, along with some big health care firms and media companies. We already have previewed two stocks of interest that will report results before markets open Monday: Ferrari and ON Semiconductor.

We also already have previewed three companies set to report results after markets close Monday: NXP Semiconductors, Take-Two Interactive and Transocean. Here is a look at three companies set to report earnings before markets open on Tuesday.

Alibaba

Chinese e-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA) has had a tough 12 months. The stock is down about 23%, including a decline of more than 16% so far this year. The Chinese government’s pressure on the company and its founder, Jack Ma, led to the cancellation of a proposed initial public offering for Ant Financial, of which Alibaba is the controlling stakeholder. It also led to warnings as recently as Friday morning that the government will increase its oversight of companies with shares trading on foreign exchanges. All this has had a chilling effect on China-based stocks.

Of 49 surveyed brokerages covering the company, 46 have given Alibaba a Buy or Strong Buy rating and the other three have rated the stock at Hold. At a recent price of around $195.50, the implied gain based on a median price target of $285.65 is 61%. At the high target of $352, the upside potential is 80%.

Analysts expect Alibaba to report first-quarter fiscal 2022 revenue of $32.32 billion, which would be up 13% sequentially and about 48% year over year. Adjusted earnings per share (EPS) are pegged at $2.21, up more than 1,000% sequentially and about 10% year over year. For the full 2022 fiscal year, analysts expect the company to post EPS of $9.76, up 685%, and revenue of $143.53 billion, 31% higher, year over year.

The stock trades at 20.1 times expected 2022 EPS, 16.0 times estimated 2023 earnings and 13.0 times estimated 2024 earnings. The stock’s 52-week range is $179.67 to $319.31. Alibaba does not pay a dividend.