5 big earnings reports: Rosy numbers at Nvidia, Alibaba | Pro Recap

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Nvidia (NASDAQ:NVDA) shares rocketed nearly 11% premarket after the chipmaker said it expect sales of some $6.5 billion in the first quarter, plus or minus 2% – better than the Street forecast of $6.43B. Meanwhile, CEO Jensen Huang was upbeat on the lucrative potential of AI while also assuaging investors that the post-pandemic slump in gaming activity was over.

Q4 earnings per share dropped by one-third to $0.88, but that was $0.07 better than analysts had expected, and revenue of $6.05B – down 20.1% from a year earlier – slightly topped the $6.01B consensus.

Following the results, Goldman Sachs upgraded the stock to Buy from Neutral with a sharply raised price target of $275 – up from the prior $162. Goldman called the quarter “impressive” adding, “We believe the combination of positive estimate revisions and a potential expansion in the stock’s multiple – consistent with historical recovery phases – will drive continued outperformance in the stock.”

A slew of other research firms also raised their price targets on the stock, including Evercore and Jefferies, which both lifted their targets to $300.

Shares were recently trading at $207.54 in the premarket.

Alibaba (NYSE:BABA) was climbing nearly 6% to $100.30 before the bell after the e-commerce giant topped Q4 estimates with adjusted earnings of CNY 19.26 ($1 = CNY 6.8986) per American depositary receipt – better than the CNY 16.63 consensus. Revenue, at CNY 247.76B, came in just ahead of estimates and represented a 2.1% rise over last year.

CFO Toby Xu said the company “continued to improve operating efficiency and cost optimization that resulted in robust profit growth,” while CEO Daniel Zhang said he expects “continued recovery in consumer sentiment and economic activity.”

Vital Knowledge analysts said BABA’s results were “solid.”

“Revenue upside was driven by the core China Commerce business along with Int’l Commerce and Cainiao Logistics while Local Consumer Services and Cloud Computing fell a bit short,” they wrote in a flash note.

On the other hand, eBay (NASDAQ:EBAY) slid more than 5% in recent premarket trading after analysts had a mixed reaction to its Q4 earnings report. The online auctioneer said earnings totaled $1.07 per share, a penny better than expectations, and revenue at $2.5B was just ahead of the consensus of $2.46B.

Both represented declines from last year, however, and Goldman reiterated its Sell rating on concerns about persisting macro headwinds, even as it increased the price target by $1 to $39. Barclays, on the other hand, said it continues to see “solid value” in the shares and maintained its Overweight rating.

Shares were recently changing hands at $45.15 in the premarket.

NetApp (NASDAQ:NTAP) shares were likewise off some 5% to $65.83 before the bell after its guidance for the current quarter ranged from $1.30 to $1.40, missing the consensus of $1.43. Revenue is seen between $1.48B and $1.63B, again below the $1.66B estimate.

For its fiscal third quarter, NetApp reported an EPS of $1.37 on revenue of $1.53 billion, vs expectations of $1.31 per share on revenue of $1.61B. Revenue fell 5.5% as hybrid cloud sales declined 8.5% to $1.38B, missing the $1.46B consensus.

Morgan Stanley reiterated an Underweight rating on the stock, writing that these results and guidance signal stronger-than-expected macro headwinds. The firm said it remains “cautious on multiple given pullback in spend to continue in NT, particularly with cloud; earnings power protected with RIF, limiting valuation downside.”

Stifel meanwhile lowered estimates to reflect “below seasonal trends through the first half of FY24, with an expected return to growth and margin expansion in 2H.”

Finally, Etsy (NASDAQ:ETSY) advanced 3.55% premarket on a Q4 revenue beat and praise from analysts on a solid quarter. The online crafts merchant said consolidated revenue rose 12.6% year over year to $807.2M, beating the $755M average analyst estimate, while earnings missed at $0.77 per share vs. the $0.80 Street average.

KeyBanc said, “ETSY’s strong execution is impressive given the current macro environment, and we view habitual and cross-category initiatives as positive for the LT story; however, we await a more stable macro backdrop to become constructive.” Barclays highlighted that Etsy beat “across all key metrics,” even as it warned, the “1Q GMS guide fell a bit short as choppiness in February is informing a more cautious outlook near-term, while a material recovery in growth later in the year is less clear.”

Shares were lately changing hands at $128.45.

Senad Karaahmetovic contributed to this report.