NEW YORK (TheStreet) -- Alibaba Group Holding (BABA) - Get Report shares are advancing 2.34% to $81.30 on Wednesday after Cantor Fitzgerald lifted its price target to $90 from $88 and maintained its "buy" rating on the stock.
The firm has a bullish outlook due to the e-commerce giant's strong second quarter fiscal 2016 earnings, which the company reported before the market opened on Tuesday.
Earnings came in at 57 cents a share, beating analysts' projections of 54 cents a share.
Revenue of $3.49 billion beat estimates of $3.39 billion.
Even though there are ongoing concerns about China's slowing economy, Alibaba is continuing to perform well, analysts noted.
Specifically, cloud computing has been on an "accelerating path," the firm added, pointing out that this is due to a growth in customers and usage.
Even though transaction growth is at risk given China's economic backdrop, investors for the time being "can breathe a sigh of relief that Alibaba is getting better at its core business-profiting from hosting e-commerce," the Wall Street Journal said.
Based in Hangzhou, China, Alibaba operates as an online and mobile commerce company in the People¿s Republic of China and internationally.
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 some concerns, 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. The area that we feel has been the company's primary weakness has been its 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 22.53% from its price level of one year ago.
- The gross profit margin for ALIBABA GROUP HLDG is currently very high, coming in at 70.71%. Regardless of BABA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BABA's net profit margin of 152.34% significantly outperformed against the industry.
- Net operating cash flow has slightly increased to $1,677.42 million or 2.25% when compared to the same quarter last year. In addition, ALIBABA GROUP HLDG has also modestly surpassed the industry average cash flow growth rate of -1.88%.
- Although BABA's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
- 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 ($16.24 versus $1.59).
- You can view the full analysis from the report here: BABA