|Bid||0.00 x 2200|
|Ask||0.00 x 2900|
|Day's Range||31.37 - 31.82|
|52 Week Range||19.21 - 33.60|
|Beta (3Y Monthly)||1.41|
|PE Ratio (TTM)||213.74|
|Earnings Date||Nov 18, 2019 - Nov 22, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||35.53|
Despite the negatives, JD.com (NASDAQ:JD) managed to blow away critics last week with a fantastic earnings report.Source: Shutterstock Everyone knows the current economic situation in China is rather unfortunate. The trade war with the United States keeps getting worse and worse. The Yuan recently broke below 7 and appears to be on the cusp of a significant devaluation. And the protests and uncertainty in Hong Kong keep intensifying. All in all, investors have a lot of jitters around Chinese stocks.That only makes it more amazing that the earnings release sparkled from top to bottom, with the company beating on revenues, earnings, and a lot of details that we'll get into. JD stock took off, rising 15% in the days following the earnings report.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWill the good times keep up? There's obviously still the macroeconomic concerns that aren't going anywhere anytime soon. And at least one plus from this earnings report isn't likely to last forever. Still, the central bearish thesis on JD stock has now been invalidated. The company can continue to grow rapidly while also delivering rising profit margins. A Fantastic QuarterJD stock rocketed up last week, and with good reason. The company's latest earnings report was simply amazing. It beat on revenues by nearly a billion dollars for the quarter, posting $21.9 billion against expectations of just $21 billion. That resulted in a far faster than expected year-over-year revenue growth rate of 23%. * 10 Cheap Dividend Stocks to Load Up On Incredibly, with revenues shooting up, JD also managed much higher profit margins. Non-GAAP earnings of 33 cents per share utterly blew away analyst expectations of just eight cents per share. Now, to be fair, some of this was due to a tax benefit that may not continue in the coming quarters. But a good chunk of it is simply from JD earning higher margins; this was their best operating margin in more than two years, in fact.The market had gotten the idea that JD was essentially paying for growth. When it wanted to post faster growth, it would up marketing spend or discount big-ticket items like electronics, thus whacking its profit margin.This quarter demonstrated that the bears appear to be wrong. The company's efforts to build scale and exploit its large competitive advantage in logistics is starting to pay off with durable operating results. JD Profit ExpectationsI own JD stock and have been involved for quite a while. As a result, I've seen both the company's up and down quarters. Unfortunately, a lot of investors don't seem to be that familiar with the CEO's growth strategy and thus extrapolate too much out of one or two quarter's of results.In the past, whenever JD announces a big quarterly profit, people assume that EPS is going to shoot up. Similarly, when margins go down, everyone starts panicking.Both reactions are not well-founded. That's because JD founder and CEO Richard Liu has repeatedly said that the company will reinvest profits back into the business. When profits go up, the company subsequently invests more in growth. Similarly, when profits slide, JD scales things back a bit.Why adopt this sort of strategy? JD has clearly said from the outset that it wants to mimic Amazon (NASDAQ:AMZN). A key part of that company's success was earning enough cash flow from operations so as to keep expanding without having to dilute the stock heavily or take on much debt.However, Amazon never cared much about accounting earnings in its formative years. The bears repeatedly said AMZN stock was wildly overvalued because they looked for accounting profits. But the real thing to watch was cash flow and the ability to keep growing.JD is running the same model. Whatever profits the company can make now are better put to use in expanding the business further. JD has a ton of competition both in China and in the other markets it is attempting to expand into. We're in the early innings of JD's growth story, so why should management get hung up on high reported profits now? JD Stock VerdictWhen you own JD stock, everyone wants to compare it to Alibaba (NYSE:BABA). And sure, Alibaba is still a much larger business than JD, but that's more than reflected in the market caps.Alibaba has a $460 billion market cap right now, and JD has a $46 billion market cap. Despite having only a tenth of Alibaba's market value, JD actually does more in annual revenues than Alibaba. Additionally, JD has 321 million active customer accounts - that's half of Alibaba's figure and equal to the entire population of the United States.Revenue is growing at more than 21% a year, margins spiked up and JD is guiding margins to be above 2017 levels through the end of the year (when the stock was up at $50). Meanwhile, JD's new business lines are paying off, revenues there grew 70% year over year.All this good stuff is happening, we must recall, during a major economic downturn in China. Get a trade deal with the U.S., and things turn even more interesting.Long-term, if JD continues to execute, it's easy to see a path to JD being worth $100 billion or more in the market, leading JD stock to a valuation of at least $65/share. If you want to invest in Chinese e-commerce, make sure to own JD stock before the trade war ends.At the time of this writing, Ian Bezek owned JD stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post JD Stock Is a Strong Buy Following a Spectacular Earnings Report appeared first on InvestorPlace.
Alibaba Group's (NASDAQ:BABA) second-quarter results fulfilled most bullish expectations of the owners of Alibaba stock.Earnings of $1.83 per share easily beat estimates of $1.50. Sales of $16.74 billion were up 42% versus the same period a year earlier. The company's cloud revenue jumped 66%. year-over-year Source: Shutterstock For weeks. I've called Alibaba stock invincible, and a core holding. I called BABA stock one of the best names to own now, and said buying Alibaba Group before BABA's earnings was investors' best chance to maximize profit. InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhat the results from Alibaba Group and its rival, JD.Com (NASDAQ:JD) prove, is that the Chinese consumer wasn't hunkering down last spring, anticipating trouble ahead. Instead, they were buying goods with both hands.But what about the future? * Major Headlines Mean Opportunities for Smart Investors The Storm Clouds GatherOn the surface, Alibaba Group exudes confidence about its future.It is buying Kaola, the largest online merchant that sells imported goods to Chinese consumers, from Netease (NASDAQ:NTES) for $2 billion. Alibaba co-founder Joseph Tsai is buying the Brooklyn Nets and their arena for $2.35 billion. But China faces an existential tipping point, one that Alibaba symbolizes. Alibaba Group is built on human capital, on people like Tsai thinking creatively and deeply about things like supply chains and software. But the best minds don't just think about business and sports.The Nets' previous owner, Mikhail Prokhorov, also thought money would immunize him from what was happening back in his home country, Russia. It didn't. And it won't for Tsai,who is reportedly worth $9.3 billion, either. The Hong Kong QuandaryIn Q2, the owners of Alibaba stock approved an 8:1 stock split in preparation for a new listing of BABA stock in Hong Kong next month.The Hong Kong exchange, like American exchanges, doesn't require corporate democracy. Dual-share structures like Alibaba's, in which the managers control a company without owning a majority stake, are not allowed on the Shanghai Exchanges. So if China decides to kill Hong Kong's autonomy, it will also be cracking down on Alibaba's corporate structure.People can't be told to think creatively about money and not be expected to think about their future. After losing most of the 20th century to anarchy, Chinese people have a strong preference for order over liberty. But all the Chinese people I know do love liberty.Alibaba has an extensive presence in Hong Kong. It owns the South China Morning Post, Hong Kong's leading newspaper. It wants to reach Chinese investors through Hong Kong's exchange. But it may have to embrace free thought to accomplish that goal. The Bottom Line on Alibaba StockFor Alibaba stock, success covers a multitude of sins.But today, economic growth requires human capital. To do their best mental work, people must be free. Money has made Alibaba Group executives Jack Ma and Joe Tsai as free as any American billionaire.But what about the people who work at Alibaba's headquarters in Hangzhou? How much liberty will they demand, and what risk to order will their demands create?As long as that's an open question, the gains of BABA stock will be limited.Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in BABA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post The Big Questions Facing Alibaba Stock appeared first on InvestorPlace.
Shares of JD.com (NASDAQ:JD) soared on Tuesday. JD stock gained nearly 13% after its second-quarter earnings came in well ahead of analysts' average expectations.Source: Sundry Photography / Shutterstock.com And there's a simple reason why JD.com stock can keep climbing. Specifically, even after those gains, JD.com is up only 2% over the past month. That's because JD stock dropped 17% in five sessions a couple of weeks ago on fears of an escalating trade war, and Tuesday's gains only recaptured most of those losses.In other words, the good news from JD's earnings doesn't seem priced in. And that, in turn, suggests that JD could keep moving higher, as long as the company gets a little bit of outside help.InvestorPlace - Stock Market News, Stock Advice & Trading Tips JD.com Crushes EstimatesCompared with analysts' average expectations, JD.com had a truly impressive quarter. Its earnings per share of 33 cents, excluding certain items, was 25 cents above the average estimate. That was the company's biggest earnings beat since its 2014 IPO. JD's year-over-year revenue growth of almost 23% was more than five percentage points better than the Street's average expectation.On an absolute basis, too, the results looked strong. The 22.9% increase in its sales was a notable acceleration from the 13% growth that JD.com reported in Q1. And its net income, excluding certain items, increased more than 600% year-over-year. * 10 Stocks Under $5 to Buy for Fall And it's how JD grew its sales and profits, not just by how much they increased, that helps the bull case on JD stock. When JD.com sold off last year, worries about a potential trade war and its impact on the Chinese economy were key drivers of the decline . But investors also fretted about the company's higher spending, which pushed profits to nearly zero in Q2 of 2018.In Q2 of this year, however, JD managed to drive strong growth while posting a modest increase in gross margin and, more importantly, controlling its operating expenses. Its fulfillment expenses only rose at half the rate of its revenue. Furthermore, its marketing spending increased less than 7%, and its general and administrative spending increased only 5%. JD.com's spending on technology jumped 34% year-over-year, but that line item amounted to less than 2.5% of its revenue.That focus on cost control is much-needed, and not just for JD.com. NetEase (NASDAQ:NTES) stock rallied after its Q2 results showed that its cost leverage had driven solid profit growth. Investors have wanted Chinese stocks to start showing some margin improvement, and NTES and JD.com both delivered.JD.com's Q2 results showed that the company is moving in the right direction. And so it's a little surprising that JD stock has not responded more favorably to the results. Why JD Stock Should Keep Moving HigherIt seems that JD.com stock can -- and maybe should -- move even higher. Again, the stock trades below where it did on July 30, before JD.com posted a blowout quarter and the U.S. decided to postpone additional tariffs. At this point, the outlook of JD stock seems to be stronger than it was two weeks ago, and yet JD stock is cheaper than it was then.And JD.com is getting close to cheap or at least, it's not quite that expensive. Heading into Q2, analysts' average 2019 EPS estimate for the full year was 68 cents. JD.com now has generated 66 cents in non-GAAP EPS in just the first two quarters of the year.JD can generate EPS of over $1 in 2019, which would put its price-earnings multiple below 30. In 2o20, that multiple could drop to the low- to mid-twenties.That multiple isn't necessarily that cheap in the context of Chinese stocks right now. Rival Alibaba (NYSE:BABA) trades at less than 20 times the average fiscal 2021 EPS estimate. Internet plays Baidu (NASDAQ:BIDU) and Weibo (NASDAQ:WB) are even cheaper.But JD.com's thin margins, still only 2%+ in Q2, still have much more room to increase. And thus there's more room for the company's profit to grow, making a higher multiple justified.JD does pose some risks. JD.com hasn't always been the most consistent performer. Sentiment toward Chinese stocks on the whole still looks shaky -- and that goes double for Chinese tech, as I wrote last month. As a result, in the near-term, JD stock might be choppy.Still, for Chinese bulls, JD stock looks awfully attractive. And there appears to be room and reason for its post-earnings gains to continue.As of this writing, Vince Martin did not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post JD.com Stock Can Keep Climbing appeared first on InvestorPlace.
Fears of recession ebb after White House considers tax cuts for millions of workers, China unveils new interest rate reforms and Germany hints at stimulus measures.
Shares of Chinese tech giant JD.com are up 12% in the last week. JD shares were up close to 2% in early market trading today as well.
Chinese internet search giant Baidu (NASDAQ:BIDU) is set to report second-quarter numbers after today's bell and I'm not too optimistic on BIDU stock ahead of the print.Source: StreetVJ / Shutterstock.com From a high-level perspective, it does appear that China's economy is rebounding. Economic data coming out of China has meaningfully improved over the past several months. Meanwhile, Chinese tech heavyweights Alibaba (NYSE:BABA), JD.Com (NASDAQ:JD) and Tencent (OTCMKTS:TCEHY) all recently reported strong quarterly numbers.But two of those three companies -- JD and Tencent -- said on their earnings calls that the ad market in China remains incredibly challenging. Tencent's ad business actually slowed this quarter. Baidu gets most of its revenue from its ad business. As such, with the broad read from recent reports being that China's ad business remains under tremendous pressure, the chance of Baidu reporting favorable numbers is not great.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's why I'm avoiding BIDU stock this earnings season. This stock is in a big secular decline because its numbers have consistently disappointed investors. Those numbers will likely continue to disappoint for the foreseeable future. Thus, while Baidu stock is pretty cheap, it's still too risky to try and catch this falling knife.The big implication here? Stay until away until there's reason to come back. Baidu's Numbers Likely Won't Be GoodThe big reason to avoid BIDU stock ahead of the Q2 print is because it looks like the numbers won't be that good. * 7 Safe Dividend Stocks for Investors to Buy Right Now Baidu has a lot of moving parts. But, at its core, this is the Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) of China. As such, Baidu is an advertising business. Specifically, this is a search advertising business. But, the whole digital ad market in China -- and specifically the search ad market -- is dramatically slowing, mostly because it's oversaturated and because the entire economy is slowing.In these slowing markets, Baidu is also losing share. This share erosion has two drivers. One, alternative ad formats are more compelling (like in-feed and social). Two, Baidu is staring at elevated competition in the search game.Net net, Baidu is losing share in a slowing market. This has caused core revenue growth rates to slow from 50%-plus a few years ago, to under 20% last quarter. At the same time, Baidu is aggressively investing in alternative growth arenas to re-stimulate growth. This big spend is killing margins. Slowing growth plus falling margins equals tumbling profits. That's exactly what's happening. BIDU stock's earnings per share is expected to be cut in half this year.It does not appear that the Q2 print will have anything in it that will change the course of this downbeat narrative. JD said in its recent conference call that the China ad market remains under great pressure. Tencent had a similar tone in its conference call, citing a challenging digital ad macro environment as the reason why their digital ad business slowed from 25% growth in Q1 to 16% growth in Q2.If JD and Tencent -- two companies whose ad businesses have been relatively strong -- struggled this past quarter on the ad front, then it's pretty likely that Baidu -- a company whose ad business has been in free-fall -- struggled too. Continued bad numbers from Baidu won't be enough to shake BIDU stock out of its multi-quarter downtrend. Baidu Stock Is Cheap -- But the Worst May Not Be OverZooming out, Baidu stock is unequivocally very cheap in the big picture.Revenue growth trends are falling flat this year. But they will probably improve over the next several years as Baidu adapts its ad business to be more relevant in China's double-digit growth ad market. Thus, Baidu should be able to start stabilizing market share over the next several years, which should lead to renewed and consistent double-digit revenue growth. Revenue growth consistency will allow the company to pull back on big growth-related investments, so margins should improve too.Realistically, Baidu could grow revenues at a roughly 10% rate from 2019 into 2025, while adjusted operating margins could bounce back to 20% (where they were in 2018). Those assumptions make $15 in EPS seem doable for Baidu by 2025. Based on a market average 16-forward multiple, that implies a 2024 price target for BIDU stock of $240. Discounted back by 10% per year, that equates to a 2019 price target of roughly $150.That's more than 50% higher than where Baidu stock trades today. Thus, BIDU stock is undervalued.But, it will remain undervalued until investors have reason to believe that Baidu will stabilize its share in China's slowing digital ad market. That won't happen this quarter. As such, for the foreseeable future, BIDU stock will likely remain undervalued. Bottom Line on BIDU StockAt some point, Baidu stock will stage a huge, rip-your-face-off rally. But not today. That rally won't happen until Baidu proves that it can stabilize share in the slowing China digital ad market, and thereby, stabilize margins and profits. Baidu won't prove that this quarter. Until it does, it's best to stay away from this falling knife.As of this writing, Luke Lango was long BABA, JD and GOOG. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Baidu Stock Looks Risky Ahead of Earnings appeared first on InvestorPlace.
(Bloomberg) -- Hong Kong demonstrators will need to look beyond mainland China for supplies of protest gear that’s defined the look of the movement.Queries on Chinese e-commerce portals such as Alibaba Group Holding Ltd.’s Taobao for umbrellas, masks and helmets would return the searches as “item not found” for buyers based in Hong Kong, while those on the mainland had positive results. Hong Kong logistics companies said a list of “sensitive items” which include black T-shirts, banners, laser pens and facial masks will be detained at customs.Protests in Hong Kong have dragged on since early June, with the government warning of the damage to the economy and the city’s reputation. Police have used tear gas and rubber bullets on demonstrators who linger after peaceful rallies ended, and the confrontations have turned increasingly violent in recent weeks.In such fights, protesters wear gas masks and helmets, and police have said some target strong laser beams at them. After entering search queries, e-commerce site JD.com showed helmets and laser pens are “out of storage for Hong Kong and Macau.” A representative of Hong Kong’s customs says it didn’t receive any directive to control the import of protest-related items, and it doesn’t know if there are any restrictions from mainland customs. Outside of business hours, a call to China’s customs went unanswered, while representatives for JD and Alibaba, which owns Taobao, didn’t immediately reply to requests for comment.According to a notice on the website of Hong Kong logistics company Dailybuyco.com, customs has strengthened controls over imports and exports. The current list of “sensitive items” also includes towels, umbrellas, glow sticks, flashlights and helmets. The list, as defined by the customs, is constantly changing, the website said, without specifying if it was Hong Kong or China authorities.Another delivery company Taopai.hk posted a similar notice earlier this month, saying that customs and the Hong Kong government are posting restrictions over imported goods, including yellow umbrellas, yellow helmets, iron pipes and knives. No “goods for riot” can be transported in freight, the post said.To contact the reporter on this story: Jinshan Hong in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Shamim Adam at email@example.com, Fion LiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
China's e-commerce company JD.com is in talks with bankers to list shares of its online grocery and delivery joint venture in the United States in May and is seeking to raise $500 million, The Information reported on Friday. The talks are still in early stages, and the amount the company hopes to raise as well as the timing of the stock market offering could change, the report said, citing two people familiar with the matter. JD and Walmart did not immediately respond to requests for comment.
Alibaba Group (NYSE:BABA) stock posted its quarterly earnings before market open this morning, but its strong first-quarter results beat are not likely to matter. The day before, Aug. 14, the Dow Jones Industrial Average fell 800 points. Fear in the markets is rising and threatens to scare off investors from China-based stocks.Source: BigTunaOnline / Shutterstock.com Despite the market volatility in the short term, what is there to like from Alibaba's first-quarter results?Before diving into its fiscal first-quarter numbers, look first at what Alibaba reported in the previous quarter. In its last quarter, BABA stock posted non-GAAP earnings per share of $1.28 (GAAP EPS of $1.47), with both figures beating expectations by a wide margin. Revenue grew a solid 51%, rising to $13.93 billion. After the results, BABA stock fell from around $195 to as low as $150 a month later. The U.S.-China trade war started intensifying at the time, pressuring investors to dump China-based stocks like Alibaba.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWithout that trade war, Alibaba stock should have traded well into the $210 range and higher. Instead, at a recent closing price of $162, its price-to-earnings ratio is just 4.3 times while its PEG ratio was 1.23.For its Q1, analysts had a consensus EPS estimate of $1.49 on revenue of $15.86, up roughly 30% from last year. And with all 18 analysts calling Alibaba stock a "buy" with an average price target of $218.94 (per TipRanks), investors must hold the stock and sit tight. Alibaba Stock's First-Quarter ResultsAlibaba reported earnings of $3.55 billion on revenue of $16.74 billion, up 204% from last year. Chinese stocks are suffering from the trade war yet Alibaba managed to cushion the negative impact of lower exports. Strong domestic demand lifted the active consumer base by 20 million. Active annual consumers at its China-based retail marketplaces reached 674 million. Core commerce revenue grew a solid 25% year-over-year, digital media advertising grew 6%, while cloud computing grew 66%, to $1.13 billion. * 10 Stocks Under $5 to Buy for Fall Drilling into the segments, the company's core commerce generated $14.14 billion, cloud computing generated $93 million and innovation initiatives generated$18 million. The cloud computing is the only segment that did not beat consensus. Still, an increase in average revenue per customer led the revenue growth for the cloud unit. In the June quarter, Alibaba launched over 300 new products and features related to the core cloud offerings. As it continues investing heavily in talent and technology infrastructure, Alibaba Cloud will continue growing. Strong Performance at Alibaba's Retail UnitThe fast-growing consumer community at Taobao lifted the growth in core commerce. Active annual customers grew, helped by referral programs through the Alipay app and a record-breaking 6.18 Mid-Year shopping Festival. Taobao expanded its market reach by attracting customers in less developed areas.Tmall, formerly the Taobao Mall, leads the consumer engagement and distribution platform for Chinese brands. During the quarter, the gross merchandise volume of physical goods, excluding unpaid orders, grew 34% year-over-year. Higher user numbers and average spending drove the growth in sales. Unavoidable Macro HeadwindAlibaba could have reported results as impressive as that of JD.com (NASDAQ:JD) but will not enjoy as big a jump in the stock price in the coming days. JD.com's market cap is 10 times smaller than that of Alibaba stock. Plus, the stock price is in the $160 range, which makes shares less liquid for small-time investors. When Alibaba splits its shares at 8:1, expect bigger rallies in future earnings reports. Writer William White explained the BABA stock split here.For its second quarter, JD.com reported revenue growing 23%, while earnings of $0.33 beat consensus by 25 cents. Service revenue grew 42% year-over-year while its operating cash flow almost doubled, to $4.53 billion. Its stock enjoyed a bounce of more than 10%. Whether an investor holds JD.com or Alibaba, the long-term prospects are strong for these firms. Alibaba is more comparable to Amazon (NASDAQ:AMZN). Both firms have a hugely successful online retail channel on the desktop and mobile, and Alibaba's cloud services is certain to bring in high profit margins in future quarters. At a forward P/E of 53 times, Amazon trades at a big premium compared to Alibaba. Alibaba's forward P/E is 19 times Bottom Line on BABA StockAlibaba will enjoy just a small bounce post earnings despite the company's outlook looking stronger than ever. Investors who remain unconcerned over the ongoing trade war should accumulate Alibaba stock.As of this writing, Chris Lau did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post After Another Strong Quarter, Alibaba Stock Will Reward Long-Term Investors appeared first on InvestorPlace.
(Bloomberg) -- Baidu Inc. has dropped off the list of China’s five most valuable internet companies, underscoring the challenges facing the search giant from a weakening economy to intensifying competition.NetEase Inc., China’s second-largest gaming house, has overtaken Baidu in market value after posting better-than-expected quarterly earnings last week. Shares of NetEase have gained 11% this year, while Baidu’s plunged 40%. The latter company, once touted as a member of China’s internet triumvirate alongside Alibaba Group Holding Ltd. and Tencent Holdings Ltd., has bled $66 billion of capitalization since its peak in May 2018 -- the equivalent of one Morgan Stanley.Baidu has struggled to fend off competition from the likes of Tencent and ByteDance Inc., both of which are luring smartphone-savvy consumers and advertisers to their popular mini-video and social media apps.The company enjoyed a near-monopoly in Chinese internet search after Google departed the market in 2010 over government censorship. This week, ByteDance launched its own standalone search engine, posing a serious threat to the almost two-decades-old Baidu. The company was previously pushed out of the Top 3 in market value by e-commerce operator JD.com Inc. and food delivery service Meituan.Baidu, together with rivals Alibaba and Tencent, has long formed part of a trio of leading internet companies known by the acronym BAT. Now even that title seems under threat, with some dubbing ByteDance the new “B” in the group. Baidu in May posted its first quarterly loss since its 2005 stock market debut, after the Chinese economy slowed and rivals chipped away at its advertising sales.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Credit has to be given where it's due -- at least the Alibaba Group (NYSE:BABA) bulls are trying. Though down in step with most other stocks since late July, Alibaba stock turned the ship around in early August before a major technical floor was broken. For the second time in less than three months, that recovery effort is unfurling on above-average volume.It remains to be seen if it will take hold. A solid second quarter report from rival JD.com (NASDAQ:JD) certainly helped fan the bullish flames of the current rebound effort. But, it wasn't enough to push BABA stock above a convergence of technical resistance before a newly-inverted yield curve stoked recession fears … again.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 15 Growth Stocks to Buy for the Long Haul Thursday's post-close earnings report from Alibaba Group may well force traders to commit to a decision, for better or worse, on Alibaba stock. BABA Stock Getting SqueezedIt's a misnomer that all of China's top stocks are in a nosedive. Certainly Weibo (NASDAQ:WB), Baidu (NASDAQ:BIDU) and Iqiyi (NASDAQ:IQ) have been fighting losing battles. Baozun (NASDAQ:BZUN), Tencent (OTCMKTS:TCEHY) and Alibaba stock remain in distinct uptrends though, even with sizeable setbacks seen in the middle of 2018.That could all change dramatically after Thursday's closing bell rings, however. That's when Alibaba is slated to reveal last quarter's results into an environment where there's little room left to roam.The chart tells the tale. The rising support line in place since early 2016 is still intact, prompting last week's rebound effort. But, a relatively young falling resistance line is also in place. That's what broke the rally effort in July, and ultimately in May as well. Click to EnlargeThose two lines are clearly on an intercept course, now less than thirty points apart. That's not a lot of room for BABA stock to do what it usually does.It's highly likely that whatever Alibaba reports on Thursday will ultimately snap the psychological underpinnings of either the support or resistance that has taken shape over the past few months. Alibaba Group Facing a HeadwindThe company's first-quarter fiscal results are going to be unveiled in a less than hospitable environment.Although the White House backed off on plans to introduce new tariffs on Chinese imports into the United States this week, older tariffs remain in place. While the U.S. economy is growing at a measurable pace, China's is starting to show serious cracks. The country's industrial output grew at a 17-year low in July. Though it hinted at a recovery in June, retail spending growth fell to 7.6% last month … the second-lowest growth pace in years. The nation's unemployment rate grew from 5.1% in June to 5.3% in July.It remains to be seen to what extent that turbulence will affect Alibaba's results. The quarter in question ended in June, so the first two months of the three-month stretch were reasonably healthy.Conversely, investors are increasingly pricing stocks based on where it seems they are going rather than where they have been. If China's e-commerce giant paints anything less than a rosy forward-picture, nervous investors may assume the worst and respond bearishly to bullish news. Looking Ahead for Alibaba StockAs of the latest look, analysts are calling for earnings of $1.46 per share of BABA stock on revenue of $15.82 billion. That's considerably more than the year-ago figures of $1.16 and $11.66 billion. The bar is set uncomfortably high.On the other hand, Alibaba only failed to top one quarterly estimate for the past three years. Again, a beat may still not be good enough against the present backdrop consisting largely of worry.Whatever's in store, just know that the chart is just as likely to lead the rhetoric as much as it's apt to be shaped by it. But, that's potentially problematic in itself.If a modest breakdown drags Alibaba stock below the aforementioned floor, that selloff will be heavily highlighted by the financial media, which will exacerbate the selling by virtue of inciting more fear. The market-wide tide will also play a role in the stock's direction from here, and clearly investors are increasingly nervous.Perhaps there's a case to be made for being on the sidelines by the time Thursday's closing bell rings, even if it means leaving money on the table. There's likely to be plenty of trade-worthy action outside of the converging wedge shape.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Earnings Could Solidify or Squelch Alibaba Stock Uptrend appeared first on InvestorPlace.
Stocks rose after the U.S. backed off on Chinese tariff threats. Meanwhile, JD.com and Tencent Music Entertainment reported better-than-expected Q2 results.
China e-commerce giant JD.com early Tuesday crushed analyst estimates for second-quarter earnings. The JD.com earnings news sent its U.S. shares higher. It gave in-line revenue guidance.
Alibaba Group (NYSE:BABA) will report earnings Thursday before the bell at an exciting and dangerous time for the company. As the trade war intensifies and turmoil in Hong Kong reaches a fever pitch, many are wondering how to trade BABA stock.Source: Shutterstock I would expect a positive earnings report for Alibaba Group. The results could even prompt a positive reaction in BABA stock. However, given the severity of the political strife and the uncertainty that could bring to the company, investors need to remain aware of four factors which could supersede Alibaba stock earnings. Expect an Earnings BeatFor its first quarter, Wall Street forecasts earnings per share of $1.46. The company reported an EPS of $1.16 in the same quarter last year. Analysts also predict revenue of $15.82 billion -- if that estimate holds, it will represent a 35.7% increase from the year-ago quarter when the company brought in $11.66 billion.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Safe Dividend Stocks for Investors to Buy Right Now Alibaba stock missed earnings estimates in the same quarter last year. However, its peer JD.Com (NASDAQ:JD) surged higher by more than 13% in Tuesday trading following an earnings beat. Although BABA stock may not react the same way, I believe the company will beat earnings. Turmoil in Hong Kong Will Weigh on BABA StockUnfortunately for investors, the only thing even more massive than the revenue and earnings growth is the uncertainty this company faces. The factors that could supersede earnings news mostly lie beyond the company's control.First, the company has begun the process to list Alibaba stock on the Stock Exchange of Hong Kong. However, this comes at a time when Hong Kong is dealing with massive protests following efforts by the Chinese government to assert more direct authority in the special administrative region. This has led to extreme worries in Hong Kong and has even prompted rumors that the protests will lead to an invasion. We have no way of knowing if that will occur. However, such fears and the intensity of the demonstrations casts obvious doubts over it's initial public offering in Hong Kong. Secondly, any power grab by the Beijing government could serve as a reminder that Alibaba stock is not actually stock in Alibaba Group. Traders have long discounted BABA compared to Amazon (NASDAQ:AMZN) for this reason. However, the political strife surrounding Hong Kong could easily prompt further discounting of the Cayman Islands-based holding company which represents BABA stock. Trade and Jack Ma's Departure Add to UncertaintyA third factor is that Chinese retailers depend on the U.S. even when they do not. This is because the Chinese economy, and many of Alibaba's customers, depend heavily on the American consumer. The trade war has hurt Chinese stocks for more than a year-and-a-half. This includes equities such as BABA stock which conduct a negligible amount of business in the U.S.Fourth, founder Jack Ma will leave his position as chairman of Alibaba in September, completing the full handover of the company to Daniel Zhang. Admittedly, traders will have to wait for years to learn the outcome of this transition. Still, such changes become a concern with conglomerates such as Alibaba. Many remember the decline of General Electric Company (NYSE:GE) after Jack Welch left and do not want to see history repeat itself.However, until proven otherwise, I would look at this handover as comparable to Steve Jobs handing the reins to Tim Cook at Apple (NASDAQ:AAPL). The Bottom Line on BABA StockFor now, the first-quarter earnings report is a less significant concern for Alibaba stock. Alibaba Group has beaten earnings for the last three quarters. Yes, the company missed estimates during the same quarter last year. Still, I expect BABA stock will exceed expectations in much the same way JD stock beat estimates earlier in the week.However, Alibaba stock faces more daunting challenges, most of which lie outside of the company's control. The company is listing shares in Hong Kong at a time when this former colony of the United Kingdom has become crippled by protests. This could also prompt investors to look at the holding company that represents Alibaba in a different light.Additionally, the political turmoil casts doubts on any business conducted in Hong Kong. Further, many of Alibaba's customers make their living -- in some respect -- with trade from the U.S. Both the trade war and the aforementioned turmoil in Hong Kong bring uncertainty to growth forecasts.Investors could see a bump in Alibaba stock following earnings. Still, with all of the turmoil, I would wait for the dust to settle before considering purchasing BABA stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post 4 Factors That Could Affect Alibaba Stock More Than Earnings appeared first on InvestorPlace.