Are Analysts Impressed In Alibaba Following Its Singles' Day Sales Event?

Shares of Alibaba Group Holding Ltd BABA have lost more than 20 percent year-to-date as China's economy has shown signs of slowing down – a potential negative for the company.

Alibaba may have eased investor concerns over a slowing Chinese economy and consumer spending after the company reported $14.3 billion in gross merchandise volume (GMV) during its annual Singles' Day sales event Wednesday.

Despite a better than expected GMV report, Wall Street's top analysts aren't fully convinced that the strong Singles' Day performance is a bullish indicator of future growth.

Alibaba reported that it oversaw $14.3 billion in gross merchandise volume (GMV) on its e-commerce platform during the annual Chinese Singles' Day sales event.

Alibaba's Singles' Day sales event took place on Wednesday and is considered to be China's equivalent of Black Friday. The event, also known as "double eleven" (as the event takes place on 11/11), drew more than 100 million consumers and dwarfs last year's U.S. Cyber Monday sales of nearly $3 billion.

Here is a roundup of what some of Wall Street's top analysts are saying following Alibaba's event.

SunTrust: Good Indicator Of Strong December Quarter Growth

Bob Peck of SunTrust Robinson commented in a note that Alibaba's $14.3 billion in GMV rose approximately 40 percent from last year's $9.3 billion GMV, while mobile usage increased to 69 percent of GMV from last year's approximate 43 percent.

Peck continued that Alibaba's overall GMV growth was "strong;" a shift from desktop to mobile is still a headwind for growth, despite an improvement in mobile monetization rates from last year. Peck also cautioned that although the sales event was a positive for the December quarter, the outperformance relative to expectations is "not indicative of the whole quarter."

Nevertheless, Peck stated that as a whole, the publicity and momentum of the platform (especially in mobile) are "positives going forward."

Shares remain Buy rated with an unchanged $100 price target.

Bernstein: Singles' Day Doesn't Provide An Indication Of Long-Term Health

Carlos Kirjner of Bernstein commented in a note that Alibaba's Singles' Day GMV doesn't provide an "unambiguous indication" of the long term health of its China Retail business.

Kirjner noted that at the end of the second quarter 2015 Alibaba had 307 million active users, and a year later, it had 386 million active users In addition, 42.6 percent of GMV originated from mobile devices last year, and this figure jumped to 68.7 percent this year. As such, it is possible that the average Taobao and Tmall consumer behavior has "changed significantly" over the past 12 months, and investors should act cautiously when using the latest data-point and past trajectories when jumping to conclusions.

Kirjner did however conclude that it is difficult to make a "conviction call" based on Wednesday's metrics, but the performance was nevertheless "quite impressive" and margin positive. As such, the analyst has "increased confidence" that his estimates for year-over-year GMV growth of 25 percent in fiscal 2016 and 23 percent the following year are "quite conservative," and the company's GMV may ultimately grow faster than his expectations.

Shares remain Outperform rated with an unchanged $110 price target.

Cantor Fitzgerald: ‘Bodes Well' For December Quarter

Youssef Squali of Cantor Fitzgerald commented in a note that while it is still "very early" to make any conclusions regarding Alibaba's quarterly performance, the strong year over year GMV growth during Singles' Day compares "very favorably" to the 28 percent GMV growth the company demonstrated in the past quarter.

Squali also noted that while there was a fair amount of "push forward purchases" given the heavy discounting nature of the sales event, Alibaba's performance is nevertheless a "strong indication" for the quarter.

Shares remain Buy rated with an unchanged $90 price target.

Stifel: Singles' Day A ‘Home Run'

Scott Devitt of Stifel commented in a note that he was most impressed with the fact that Alibaba's Singles' Day GMV surpassed last year's record in less than 12 hours. The analyst also stated that the results illustrate the company's "increasingly important role" in China's e-commerce space.

Devitt continued that an acceleration in mobile transactions will allow Alibaba to offset near-term declines in desktop take rates and position the platform to better monetize its users through new apps, seller tools and ad formats.

The analyst further noted that Alibaba's strong performance marks a "positive step" toward the company's evolution into a "global digital content and eCommerce ecosystem."

Shares remain Buy rated with an unchanged $94 price target.