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What you need to know about Alibaba's results
It was the biggest IPO ever. And on Tuesday we will get a chance to see how Alibaba is doing as the company’s first quarterly earnings results are published. Morningstar Research suggests there will be strong top-line growth but that margins are expected to contract.
Consumer Equity Strategist, RJ Hottovy, believes revenue will exceed 50% this quarter. He says that will be fueled by the increased number of active users. But he also warns that margins may well contract as the company begins a period of large investment including in its own mobile platform.
Hottovy believes that revenues will decelerate over the next five years. He does, however, think that the company will build scale advantages “with gross margins approaching 75% and operating margins 48%”. So he predicts the growth story for Alibaba “is pretty compelling”.
02:18 minutes
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