Alibaba Tops Fiscal Q4 Earnings: ETFs In Focus

Chinese e-commerce giant Alibaba Group (BABA - Free Report) reported strong fourth-quarter fiscal 2020 results before the opening bell on May 22, wherein it beat earnings and revenue expectations.

Earnings of $1.30 per ADS beat the Zacks Consensus Estimate of 59 cents and increased 7% year over year. Revenues climbed 22% to $16.14 billion and topped the consensus mark of $15.28 billion. Strong performance was driven by solid domestic retail businesses and robust cloud computing revenue growth.

As people stayed indoors and brick-and-mortar stores remained closed during the lockdown led by coronavirus crisis, online orders surged with the company's core commerce business rising 19% in the quarter. Cloud computing revenues soared 58%, and digital media and entertainment revenues increased 5%.  

Annual active consumers increased 15 million from the last quarter to reach 726 million in March. Mobile monthly active users in its China retail marketplaces increased 22 million quarter over quarter to 846 million.

Alibaba expects revenue growth to slow this year, reflecting post-COVID 19 economic uncertainty at home as well as business disruption from potential U.S.-China tensions. It expects to generate more than 650 billion yuan ($91 billion) in revenues in fiscal 2021, which represents at least 27.5% growth annually. The Zacks Consensus Estimate for revenues is pegged at $95.3 billion.

Alibaba currently has a Zacks Rank #3 (Hold) and a VGM Score of B. It belongs to a top-ranked Zacks industry (placed at top 16% of the total 250+ industries in the Zacks universe).

ETFs in Focus

ETFs having the highest allocation to the Chinese e-commerce giant will be in focus in the days ahead. Below, we have highlighted six ETFs in detail:

Invesco BLDRS Emerging Markets 50 ADR Index Fund (ADRE - Free Report)

The product offers exposure to 50 emerging market-based depositary receipts by tracking the S&P/BNY Mellon Emerging Markets 50 ADR Index. About 48.1% of the portfolio is allotted to Chinese firms, with Alibaba occupying the top position at 19.5%. Taiwan, Brazil and India round off the next three spots in terms of country exposure. Consumer discretionary, information technology, communication services and financials are the top four sectors. ADRE has amassed $104.2 million in its asset base while trading in light volume of about 14,000 shares. It charges 30 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

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