It's been a good week for Alibaba Group Holding Limited (NYSE:BABA) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.6% to US$92.56. Revenues were CN¥206b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at CN¥8.51, an impressive 49% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Alibaba Group Holding after the latest results.

Check out our latest analysis for Alibaba Group Holding

Taking into account the latest results, the most recent consensus for Alibaba Group Holding from 48 analysts is for revenues of CN¥898.8b in 2023 which, if met, would be a credible 5.4% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 140% to CN¥35.90. In the lead-up to this report, the analysts had been modelling revenues of CN¥923.1b and earnings per share (EPS) of CN¥35.56 in 2023. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at US$155even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Alibaba Group Holding at US$230 per share, while the most bearish prices it at US$115. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Alibaba Group Holding is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Alibaba Group Holding's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 7.2% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that Alibaba Group Holding is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$155, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Alibaba Group Holding analysts - going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Alibaba Group Holding you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.