The Recent News From Alibaba: It Launches Cryptocurrency Mining Platform – Part 2
The post further explains how Alibaba is faring and the analysis of experts on its market capitalization. Enjoy this short writeup filled with details for your reference.
The Continuation On What To Look For From Alibaba
Here we bring you the continuation from the previous post on Alibaba and its take on the cryptocurrency mining platform. The giant online retail platform Alibaba Group Holdings Ltd. often called Amazon.com of China is, therefore, bracing for the financial fallout from the worst global economic crisis in recent history. While the fact that the coronavirus pandemic has caused a major downturn in Alibaba’s key consumer markets, it includes China. Hereafter it is known that investors are sure to focus on the mode of operation that these forces are affecting the growth of Alibaba’s annual active consumers which comes as a key metric that is when the company reports earnings recently on May 22, 2020, for Q4 2020 fiscal year. The company has therefore reported the fiscal year ended March 31, 2020, where analysts estimate that the company’s adjusted net income plunges amid slower growth in both revenue and annual active consumers.
Alibaba’s stock has rebounded despite crashing on fears of the spread of the COVID 19 and is currently outperforming the broader market. Compared to the S&P 500’s total return of 4.0% over the past 12 months the company’s shares have provided investors with a total return of 34.0%. Consequently, according to this story key Alibaba financial data has remained to be converted from the Renminbi to USD using CNY/USD exchange rate of 0.140649 as of May 18, 2020.
Whereas it was reported in the most recent quarter that Alibaba has posted adjusted net income growth of 51.9% for the Q3 FY 2020 while compared to the same quarter a year ago. This states that it was the company’s second-highest year-over-year rate of growth in nine quarters as the revenue rose just 37.7% thereby continuing a decelerating trend that began two quarters earlier that has marked the lowest YOY revenue growth which comes in at least 15 quarters. Before crashing on fears over the spread of the coronavirus, Alibaba’s shares fell slightly following the report.
Where Is Alibaba Heading?
As analysts expect one of the company’s worst quarters in years, the stock has rebounded as the adjusted net income is forecast to fall 23.2% YOY making the first decline in at least 16 quarters with revenue growth expected to slow to 14.3% YOY. thereby it comes well under half the growth rate posted in Q3 FY 2020. This comes to be barring some quick V-shaped recovery in the global economy as the company shares are likely to be under pressure for much of the rest of the year.
Investors are set to focus on Alibaba’s annual active consumers as mentioned above with the key metric referring to the number of user accounts along with one or more confirmed the orders on Alibaba as the online platforms hence during the previous 12 months. Thereafter regardless of whether or not the transaction was settled. It was thereby seen that retaining and attracting active consumers is important while the Alibaba business model in large parts consists of selling marketing services to the merchants that sell their wares on the company’s online platforms. Hence it can generate advertising revenue from those merchants as the more active consumers Alibaba attracts the more it is possible for the company.
Reportedly Alibaba has a total of 711 million annual active users for Q3 FY 2020 making the rise of 11.8% while compared to the same quarter a year earlier. Thereafter it has the slowest rate of growth as the company recently posted since Q2 FY 2018 and was also a continuation of the deceleration trend that had begun in Q4FY 2019. Hereby the trend of deceleration is expected to continue with analysts forecasting a rise of 10.6% to 723,4 million annual active consumers for Q4 FY 2020. As the Q4 covers only part of the period when the pandemic began to hurt global economies. It is here that Alibaba ha been facing a daunting challenge in growing the ranks of its active consumers in the coming year amid job losses and falling income s in China and other markets.
The Final Words To Sum Up The Discussion
Although Alibaba is all set to bring itself into the cryptocurrency scenario, there are quite a few challenges it is facing. To overcome them the experts, need to identify the major factors influencing their presence. Here is why they need to be more positive towards the cryptocurrency and its uses. Stay tuned for more on this topic