Alibaba Stock Plummets on Q4 Investment Losses Despite Revenue Growth

Alibaba Stock

Alibaba Group Holding Limited (NYSE:BABA) stock experienced a decline after the company reported its quarterly results for the fiscal fourth quarter of 2023. Here are the key highlights:

  • Revenue Growth: Alibaba reported a 7% year-on-year increase in revenue to $30.73 billion for the fiscal fourth quarter, surpassing analyst expectations of $30.40 billion.
  • Earnings: Adjusted earnings per ADS came in at $1.40, slightly missing the analyst consensus estimate of $1.41. However, net income plummeted by 86% year-on-year to $453 million due to substantial investment losses during the quarter. Adjusted net income declined by 11% year-on-year to $3.38 billion.
  • Segment Performance: Various segments of Alibaba demonstrated mixed performance. Taobao and Tmall Group revenue grew by 4% year-on-year to $12.91 billion, while Alibaba International Digital Commerce Group revenue surged by 45% year-on-year to $3.80 billion. Local Services Group revenue increased by 19% year-on-year to $2.03 billion, driven by and Amap.
  • Cloud and Media: The Cloud Intelligence Group witnessed a 3% year-on-year revenue growth to $3.55 billion, while the Digital Media and Entertainment Group experienced a slight decrease of 1% year-on-year to $685 million.
  • Dividend and Stock Buyback: Alibaba’s board approved a $4.0 billion dividend for fiscal year 2024, comprising an annual regular cash dividend of $1.00 per ADS and a one-time extraordinary cash dividend of $0.66 per ADS. Additionally, during Q4, Alibaba repurchased 65 million ADS worth $4.8 billion under its share repurchase program.
  • Listing Preparation: Alibaba announced its preparation for its primary listing in Hong Kong and anticipates completing this conversion by the end of August 2024.

Despite these announcements, BABA stock has seen a decline of over 4% in the last 12 months. The market’s reaction reflects concerns over the significant investment losses incurred by Alibaba during the quarter, overshadowing its revenue growth and dividend declaration.

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