Shares of Alibaba (BABA) are expected to continue riding their nearly 40% year-to-date run up to $121.40 when the company releases its 2016 fourth quarter and full-year financial results before the market opens on Thursday.
The Chinese e-commerce giant is expected to report earnings of 66 cents per share on revenue of $5.21 billion, according to analysts surveyed by FactSet. The Amazon.com (AMZN) competitor has a history of beating on earnings, with the trailing four quarters topping estimates.
The stock typically reacts strongly to earnings, whether that's up or down, and it isn't always dependent on earnings and revenue. Most investors are also looking for a guidance beat. "It's a tough call as to how the stock will react, but I think it will be positive," Tigress Financial Partners CIO Ivan Feinseth said.
The company is set up for a winning quarter because the business trends are in its favor and the performance drivers are in its favor, according to Feinseth. Nowhere is this more clear than in fellow Chinese e-commerce giant JD.com's (JD) positive results from the past quarter. JD.com reported a 41% year-over-year growth in revenue to $11.05 billion.
For the previous quarter, Alibaba reported revenue growth of 54% year-over-year to nearly $7.7 billion. The e-commerce company is in good shape to continue this growth considering the National Bureau of Statistics said retail sales were up 24% year-over-year in China for the month of April, although this was a deceleration from the 33% year-over-year growth in March.