Cantor Fitzgerald Likes Alibaba Ahead Of Q1 Earnings Release

Cantor Fitzgerald expects in-line result from Alibaba Group Holding Ltd BABA when it reports its first-quarter numbers on August 11.

The Street expects adj. EPS of $0.62 on revenue of $4.526 billion (41 percent year-over-year). The brokerage projects EPS/revenue of $0.73/$4.147 billion (+27 percent year-over-year). Cantor's estimates exclude the contributions from the acquisitions of Yokou and Lazada, both of which closed during the quarter.

"Growth in active users and monetization to drive healthy growth in China retail revenue. We expect active user growth to increase 19 percent Y/Y, helping contribute to a healthy increase in revenue," analyst Youssef Squali wrote in a note.

Squali, who expects the company's China retail revenue growth at 27 percent to $3.216 billion, noted that the tweaks across mobile and desktop versions should boost monetization. The analyst projects international commerce revenue to grow 16 percent to $328 million.

Related Link: Morgan Stanley Highlights Expectation For Robust Revenue Growth From Alibaba

Further, the analyst expects the company to reiterate its 2017 outlook for revenue growth of 48 percent plus year-over-year and 36 percent plus excluding acquisitions. Current consensus is at 41 percent year-over-year, reflecting a mix of organic and reported growth forecasts across the Street.

On the macro front, Squali noted that the China's retail sales growth in calendar second quarter averaged about 10.2 percent year-over-year versus about 10.3 percent in the first quarter, implying continued growth in consumer spending despite overall economic slowdown.

At the time of writing, shares of Alibaba were up 0.33 percent to $84.87. Squali has a Buy rating and $95 price target on the stock.