On Thursday, Citi reaffirmed its Buy rating and a $122.00 price target for Alibaba (NYSE:BABA) Group Holding Limited (NYSE:BABA) stock, following the company's mixed financial results for the first quarter of fiscal year 2025.
While Alibaba's total revenue increased by 4% year-over-year to Rmb243.2 billion, it fell short of Citi's projection of Rmb250.0 billion and the consensus estimate of Rmb249.8 billion.
The China retail segment experienced a 2% decline in revenue to Rmb107.4 billion. However, customer management revenue saw a slight increase of 1% year-over-year to Rmb80.1 billion.
The company's various divisions showed mixed performance, with the International Digital Commerce Group witnessing a robust 32% year-over-year growth to Rmb29.3 billion, and the Local Services Group recording a 12% increase to Rmb16.2 billion. The Shipping Delivery Network also posted a 16% increase in revenue to Rmb26.8 billion.
Alibaba's Cloud Intelligence Group reported a 6% year-over-year growth to Rmb26.5 billion, while the Digital Media and Entertainment segment saw a 4% increase to Rmb5.58 million.
Despite the lower-than-expected revenue, non-GAAP net income to ordinary shareholders decreased by 10% year-over-year to Rmb40.3 billion, which was still 16% higher than Citi's estimate of Rmb34.8 billion and 6% above the consensus of Rmb38.1 billion.
This beat was attributed to a higher gross profit margin and reduced research and development costs, offsetting the effects of lower revenues and increased sales, marketing, and general and administrative expenses.
The non-GAAP earnings per ADS (EPADS) reported was Rmb16.44, outperforming both Citi's estimate of Rmb14.01 and the consensus of Rmb15.65.
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