Bob Peck Reiterates Buy, $100 Target For Alibaba

• Shares of Alibaba Group Holding Ltd (NYSE: BABA) have declined 32.4 percent over the past year, falling almost to their 52 week low on September 28, 2015, at $57.39.
• Robert S. Peck of SunTrust Robinson Humphrey has reiterated a Buy rating and price target of $100 on the company.
• With the company scheduled to report earnings on January 28, Peck mentioned that while the headwinds seen in the September quarter persist, the stock already discounts for these risks.

Analyst Robert Peck expects Alibaba to report 28 percent year-on-year GMV growth and 29 percent revenue growth in 4Q, driven by improved monetization and targeting, as well as improvements in mobile.

Peck also expects that the company to “continue its efforts to provide increased disclosure around these investments and the value they deliver, as well as the impact to the core business.”

TMall And Growth Initiatives

TMall is likely to have continued to grow faster in 4Q, with robust Single’s Day performance and cross-border efforts.

The company’s EBITDA margins are expected at 58 percent, reflecting robust investments and core margins.

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“Monetization improvements are being driven by increased PC ad load, continued gains in CTR from personalization and long tail expansions, mobile ad load and adoption by merchants… and the mix-shift to Tmall,” the SunTrust report said.

However, macro pressures continue to be a key concern among investors.

Peck expects Alibaba to start providing more details regarding its growth initiatives, “highlighting the opportunities as well as the underlying core strength.”

Image Credit: By Olaf Kosinsky (Own work) [CC BY-SA 3.0 de], via Wikimedia Commons