Alibaba (BABA) Crushes Singles' Day Record and Forecasts, Total Sales: $14.3 Billion

Singles' Day results are in. Alibaba (BABA) announced that its total Singles' Day sales reached $14.3 billion, an increase of over 50% from last year's total of $9.3 billion.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Singles' Day results are in. Alibaba (BABA) - Get Report announced that its total Singles' Day sales reached $14.3 billion, an increase of over 50% from last year's total of $9.3 billion.

Earlier today, Alibaba said it generated $10 billion in sales in 12 hours. 

These figures far surpass sales from Black Friday and Cyber Monday, the shopping holidays immediately following Thanksgiving. In 2014, shoppers spent $1.5 billion and $2.6 billion, respectively, according to comScore.

SunTrust analyst Bob Peck predicted Alibaba would generated $12 billion in GMV this year. 

What started as a one-day shopping spree by Alibaba in 2009 to celebrate and encourage young singles to treat themselves, the "Global Shopping Festival" has become the world's biggest online shopping day of the year.

With China's e-commerce growing at a rapid pace of 30% annually, it's no surprise that more and more consumers are throwing cash at their screens, according to Kevin Carter, founder of The Emerging Markets Internet ETF (EMQQ).

"China is the most advanced market in terms of Internet and smartphones...they're well ahead of everybody else," Carter added.

Even though Alibaba is the dominant player with 70% of the market share, there's competition from smaller Chinese rivals like JD.com (JD).

The two have been in a fierce battle leading up to Singles' Day. Last week, JD.com filed a complaint with a Chinese regulator, State Administration of Industry and Commerce, accusing Alibaba of allegedly telling its merchants not to participate in JD.com's Singles' Day promotions, according to theWall Street Journal.

Alibaba quickly denied these accusations stating, "JD is panicking because they're losing. They simply can't match our customer and merchant experience and logistical scale because Alibaba wins with customers and merchants as we provide a superior experience for users on our platforms."

Aside from dealing with these complaints, Alibaba has been facing intense criticism for its stock falling below its IPO price of $68 in August, since peaking a high of $120 in November last year. Part of this is due to weak Chinese economic data and devaluation of the yuan in August rattling investors.

However, Carter said concerns about China's economic slowdown and its impact on Alibaba have been over hyped. "People have been saying Alibaba has been battling with counterfeit goods, slowing revenue, but I think the business is doing just fine, it's doing great and it's very profitable."

Shares of Alibaba are falling 1.94% to $79.85 late Wednesday morning. 

Separately, TheStreet Ratings team rates ALIBABA GROUP HLDG as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate ALIBABA GROUP HLDG (BABA) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BABA has underperformed the S&P 500 Index, declining 21.44% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • ALIBABA GROUP HLDG reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($16.60 versus $1.59).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 571.9% when compared to the same quarter one year prior, rising from $514.69 million to $3,458.36 million.
  • Although BABA's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average.
  • The gross profit margin for ALIBABA GROUP HLDG is currently very high, coming in at 71.73%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 101.46% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: BABA
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