Major Earnings Reports Implied Moves: Alibaba Leads with 5.78% Expected Movement

Several major companies, including Alibaba (BABA), are expected to report earnings today. TipRanks provides expected earnings moves based on options prices, helping investors plan their strategy. The list of major earnings and their implied moves is divided according to the timing of each company's earnings release. Options trading has known risks and thorough research is recommended.

Several major companies, including Alibaba (BABA), are expected to report earnings today. TipRanks provides expected earnings moves based on options prices, helping investors plan their strategy. The list of major earnings and their implied moves is divided according to the timing of each company's earnings release. Options trading has known risks and thorough research is recommended.

Alibaba Group Holding Limited (BABA) is set to report its Q1 FY26 earnings on August 29, with analysts expecting earnings of $1.98 per share, down 14% year-over-year (YoY), and revenues of $35.15 billion, up 5% YoY [1]. The company plans to refinance $6.5 billion in loans to ease debt pressure and invest in growth areas like cloud, AI, and food delivery. Mizuho analyst Wei Fang trimmed his price target to $149 from $160, citing rising margin pressure and competition in China's local commerce space. Options traders expect a 6.14% move in either direction immediately after the earnings report [2].

The earnings report comes amid significant strategic shifts for Alibaba. The company is planning to spin off its autonomous driving unit, Banma Network Technology, via a Hong Kong IPO, reducing its stake from 44.72% to 30% [3]. This move aims to unlock value for both Alibaba and Banma, positioning the latter as an independent player in China's AI-driven smart mobility sector. The spin-off aligns with Alibaba's broader strategy to streamline operations after the cancellation of its Cainiao logistics IPO in 2024.

Despite challenges such as a significant RMB 50 billion investment and higher spending in instant commerce, analysts remain optimistic about Alibaba's stock, with a price target suggesting a 25% upside potential [1]. The company's strong balance sheet and 8 consecutive quarters of buybacks bolster investor outlook [2]. However, the $433.5 million settlement tied to Ant Group’s failed IPO continues to weigh on investor confidence. The company agreed to a $433.5 million settlement to resolve claims tied to Ant Group’s failed IPO and regulatory hurdles. While it closes litigation, investor skepticism over transparency and governance persists [2].

Alibaba's strategic focus on cloud and e-commerce growth, particularly its AI services, is bolstering investor confidence. The company's recent expansion into South Korea, Mexico, and Thailand further underscores its commitment to meeting demand [1]. The company's advancements in AI, including its open-source model Qwen3-Coder, are gaining traction, positioning it as a key player in the AI space and potentially driving future stock performance [1].

The international e-commerce arm, AIDC, also shows signs of profitability after years of losses. Management expects quarterly profits soon, which could reduce pressure on group earnings and improve margins. Meanwhile, Chinese government stimulus measures, including subsidized consumer loans, could boost domestic spending and benefit Alibaba's core e-commerce division [2].

Valuation remains another draw. BABA trades at about 11.3x FY2027 earnings with a PEG ratio of 0.55, levels that appear discounted relative to peers like Amazon AMZN and eBay EBAY. Some analysts see 50% undervaluation compared with Western counterparts [2].

Risks remain, particularly regulatory uncertainty in China and U.S.-China tensions that have prompted some funds to exit Chinese equities. Still, with strong balance sheet cash and a sharpened AI strategy, Alibaba may be setting up for a pivotal earnings moment.

References:
[1] https://www.ainvest.com/news/wall-street-sees-20-upside-alibaba-stock-q1-earnings-strategic-spin-2508/
[2] https://www.tradingview.com/news/gurufocus:27dca48a8094b:0-alibaba-q1-earnings-preview-what-to-expect-from-upcoming-report/
[3] https://www.ainvest.com/news/alibaba-banma-ipo-strategic-spin-opportunity-china-autonomous-driving-sector-2508/