Alibaba (BABA) PT Lowered to $89 at RBC Capital Following EPS; 'Outperform' Maintained

RBC Capital analyst Mark Mahaney trimmed his price target on Alibaba (NYSE: BABA) to $89.00 (from $95.00) but maintained an Outperform rating following earnings this morning.

Mahaney commented, "BABA posted strong December Qtr results that materially beat Street on Revenue, EBITDA & EPS. Upside primarily due to Mobile Retail and Cloud Computing segments."

Keys the to quarter, according to Mahaney: 1) Strong Mobile Trends – Mobile GMV of 651MM RMB came in shy of the Street @665MM, but the 2.88% Take Rate came in way better than the Street, leading to Mobile Revenue upside. Desktop continues to decline, but Mobile is where it’s at and where it’s gonna be… 2)Strong Cloud Computing– Growth remains very robust – +126% Y/Y, tho still represents ~2% of total revenue. 3)Slowing Active Users & GMV– Active Buyer growth (+22% Y/Y) decelerated, but did reach 407MM, while Tmall GMV growth slowed to 37% Y/Y. & 5)EBITDA Margins- BABA posted Dec. ‘15Q EBITDA of 19.1B RMB, implying margin of 55%.

The firm's FY2017 revenue estimate increases 2% while EBITDA falls by 8% to 139B RMB and 66B RMB, respectively.

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 $69.54 yesterday.

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