How to Play BABA Stock as Alibaba Earnings Date Nears

The Alibaba earnings date is set for May 7. The company is expected to report earnings per share (EPS) of $0.43 and revenue of $2.78 billion.

But with the Alibaba Group Holding Ltd. (NYSE: BABA) earnings date just around the corner, some investors are worrying about a recent statement from the company's founder Jack Ma.

Alibaba earnings dateThis week, Ma said his company "has really developed too quickly." He's starting a hiring freeze that will last through 2015.

At the end 2014, Alibaba had 34,081 employees. That was a 63% gain from 2013's employee count.

The news has hit BABA stock, which has fallen nearly 3% from Monday. It closed at $82.45 Wednesday.

That pushes BABA's total 2015 decline to 21%.

Now investors who heard so much about BABA's potential leading up to the record-breaking $25 billion IPO are wondering what to do with the stock.

Here's the deal: Despite the recent hiccups, Alibaba stock is one of the best long-term buys on the market today.

In fact, Money Morning's Defense and Tech Specialist Michael Robinson says Alibaba "could be the single-greatest wealth opportunity of our lifetime."

Here are three reasons why we're long-term bulls on BABA stock...

Three Reasons to Be Bullish on Alibaba Stock Now

The first reason to be bullish on Alibaba is its home market.

In 2013, online shopping in China was a $298 billion industry. That surpassed the United States as the largest e-commerce market in the world.

Alibaba earnings dateThe market is growing too. The management consulting firm AT Kearny estimates it will be worth $718 billion by 2017. A recent study by the China Internet Network Information Center (CNNIC) determined the number of Internet users in the country will hit 800 million by 2016 or sooner.

"Alibaba is gaining traction in its home market in China just as that country's people are truly joining the Internet revolution," Robinson said. "And the development of easy-to-use mobile commerce is giving Alibaba a strong tailwind."

The second reason to be bullish is Alibaba's mobile push.

Last quarter, Alibaba reported 265 million mobile monthly active users. That was yearly increase of 95%.

According to the research firm Gartner, mobile payment transactions will grow by 35% annually through 2017. The global market for mobile payments will reach $721 billion by the end of 2017.

Alibaba is seeing the impact of that market growth. In last quarter's earnings report, gross merchandise volume from mobile platforms increased 213%.

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Finally, the third reason we're bulls on Alibaba stock is the company's rock-solid financials.

This quarter revenue should grow nearly 44%. That's incredible growth for a company bringing in $2.8 billion per quarter.

Operating margins are strong, too, at almost 37%. The company has more than $6 billion in operating cash flow, which gives it great flexibility for acquisitions.

Gross merchandise volume has been on the rise as well. Last quarter, the company reported that GMV was up 49%. That was spurred by a user base that grew to 334 million people - more than the entire population of the United States.

Now that we've outlined why we're bullish on BABA stock, here's the single best strategy for investing in BABA stock...

How to Invest in BABA Stock Ahead of the Alibaba Earnings Date

Alibaba is a great stock to invest in little by little.

"Alibaba is not a 'back-up-the-truck-and-invest-all-you-have' stock," said Money Morning's Executive Editor Bill Patalon. "It's a stock you want to accumulate over time, using sell-offs like this one as opportunities to add to your holdings."

And Patalon said you can invest in BABA for "pennies" at a time thanks to the way discount and online brokerages have revolutionized trading for retail investors - slashing fees and taking away the onus of buying shares in "odd lots."

If you accumulate shares and let this investment ride over time, you can be rewarded.

The Bottom Line: Investors are awaiting the Alibaba earnings date on May 7, after months of losses for the stock. And while some investors are worried about more dips, Alibaba stock is actually one of the best buys on the market. There are three huge catalysts that will drive BABA stock higher. In fact, this stock could bring profits for years to come according to our experts.

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