Alibaba, the Chinese Internet giant that raised a record $25 billion in a public offering two months ago, is scheduled to release its first earnings report tomorrow before the market opens.
Investors have huge expectations for the company, which is trading near an all-time high today. This morning, Alibaba’s stock is up 4 percent, or nearly $4, to $102.52 a share. With a market valuation of $252.7 billion, that makes the conglomerate worth more than Walmart, the world’s largest retailer.
Many will be watching with earnest to see how the company will interacts with Wall Street. Will it take a conservative approach like Apple or Amazon? Or, will it be more revealing, like Google or Microsoft?
Analysts surveyed by Thomson Reuters are expecting a net profit of $1.16 billion for the quarter, up 45 percent from a year earlier. As for revenue, analysts are estimating sales of $2.61 billion, which would also mark a 45 percent increase year over year.
Going into earnings, one thing to note about Alibaba is that while it’s often compared to Amazon, it’s not technically a retailer. Instead, it operates huge online marketplaces — called Taobao and Tmall — where merchants run their own storefronts. Alibaba’s model is more comparable to eBay because it earns a cut of each transaction and does not own any physical warehouses.
Alibaba also earns money from merchants who pay for keywords on its marketplaces, similar to how Google makes money on search.
Investors are also expecting Alibaba to forecast strong results for the current quarter through December. The period includes China’s Nov. 11 annual discount day, called Singles Day sale, which is Alibaba’s biggest shopping event of the year similar to Cyber Monday. Last year, it generated about $5.8 billion in transactions within 24 hours.