Alibaba (BABA) PT Lifted to $130 at RBC Capital

RBC Capital analyst Mark Mahaney reiterated an Outperform rating and boosted his price target on Alibaba (NYSE: BABA) to $130.00 (from $120.00) following strong Q2 results in its first quarter as a public company.

The keys, according to the analyst: – Positives: 1) Strong Metrics Trends -- 4 consecutive Q’s of modest/slight acceleration in Active Buyers (up 52% Y/Y in September Quarter to 307MM), and an impressive Mobile MAU level of 217MM; 2) Improved Mobile Take-Rates – 1.9% Take Rate is now at 74% of the Desktop Take Rate vs. 23% in the prior year period; & 3) Accelerating GMV Growth – up 49% Y/Y vs. 45% in the June Quarter. Negatives: 1) Margin Pressure – Gross Margin of 67% was down 400 bps Q/Q due in part to increased investments in Alibaba Cloud Computing/BABA’s data platform, and EBITDA Margin of 50% was also lower than expected, but negatively impacted 400 bps by consolidations of UCWeb and AutoNavi; 2) Revenue Upside From Lower Value Segment – About 600MM RMB upside came from the Other Revenue segment, which benefited from the UCWeb/AutoNavi consolidations; & 3) Lack Of Guidance – Only one Internet stock that we cover doesn’t provide guidance (GOOGL), and that feature has created perceptions of hubris and lack of cost discipline…

The analyst raised FY2016 Revenue increased by 3% to 111B RMB, and EBITDA increased by 5% to 57B RMB

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 $106.07 yesterday.

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