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Alibaba Group Holding Limited (BABA) Stock Guide

June 02, 2021
78
Bull Case
  • Revenue growth higher than the industry and sector averages
  • Forward P/E ratio low relative to industry peers
  • Forward P/B ratio low relative to industry peers
  • Forward P/S ratio low relative to industry peers
  • Forward PEG ratio low relative to industry peers
  • Buy analyst rating
  • Enterprise Value/Revenue ratio high relative to industry peers
Bear Case
  • Company’s profitability is declining
  • High short interest

Before we start: if you're looking for BABA stock price, you can quickly find it out by visiting Finny and typing "BABA quote". If you're looking for a quick scoop on BABA stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "BABA". You'll get all this info in one place. Or you can just type "BABA news" to get the latest stock news.

Looking to buy or sell Alibaba Group Holding Limited (BABA)? Interested in getting the full scoop on BABA, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this BABA stock guide, we'll address key questions about BABA, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are BABA earnings?
2. When is BABA earnings date?
3. What is BABA stock forecast (i.e., prediction)?
4. BABA buy or sell? What is BABA Finny Score?
5. What are the reasons to buy BABA? Why should I buy BABA stock?
6. What are the reasons to sell BABA? Why should I sell BABA stock?
7. What are BABA key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are BABA earnings?

BABA trailing 12-month earnings per share (EPS) is $8.95.

2. When is BABA earnings date?

BABA earnings date is August 18, 2021.

Analyst Predictions

3. What is BABA stock forecast (i.e., prediction)?

Based on BABA analyst price targets, BABA stock forecast is $0.00 (for a year from now). That means the average analyst price target for BABA stock is $0.00. The prediction is based on 55 analyst estimates.

The low price target for BABA is $0.00, while the high price target is $0.00.

BABA analyst rating is Strong Buy.

Analysis

4. BABA buy or sell? What is BABA Finny Score?

Our quantitative analysis shows 7 reasons to buy and 2 reasons to sell BABA, resulting in Finny Score of 78.

5. What are the reasons to buy BABA? Why should I buy BABA stock?

Here are the reasons to buy BABA stock:

  • Alibaba serves about 80% of the Chinese e-Commerce market where population density is very high. E-Commerce Index reveals which developing markets hold the most potential for online growth, and China is now leading the race in terms of maximizing the potential of the Internet compared with the West. The low-cost, widely available telecommunication infrastructure in China has increased the popularity of online shopping.
  • Alibaba’s Gross Merchandise Value (GMV) is very solid. GMV is defined as the total value of transactions made across the company’s marketplace. It is a very important metric for e-Commerce companies.
  • Alibaba continues to witness increasing monetization rates (i.e., the amount Alibaba earns from the sale of goods on its platforms is going up). The company’s focus on foreign brands and high-quality merchants on its platforms continue to increase the online marketing inventory on both mobile and the PC, thus further improving the monetization rate.
  • Alibaba has been supplementing organizational growth with strategic acquisitions. The company spent billions on acquisitions last year in varying sectors ranging from film production to taxi-booking services to professional soccer.
  • We expect Alibaba’s payment platform will continue to grow, driven by the move toward online shopping all over the world. Its online payment platform includes a lot of services like bank transfers, Alipay account transfers, payment of credit card and utility bills at no extra cost, mobile top-up with credit, bank balance check, bus ticket purchases, online checkout on many sites and in-store payments. Moreover, Alibaba has made full use of the exponential increase in smartphones and tablets for making payments.
  • Alibaba is also taking steps to strengthen its position outside China. The company has been looking to international markets to expand its business and its current strategy is to generate earnings through investment in the U.S.
  • Increased competition and market saturation has forced Alibaba to move beyond hawking goods online. The company is trying to build its business as an ecosystem of retail, cloud and artificial intelligence. Having been around long enough to establish logistical relationships through Cainiao, payments processing through Ant Financial and a solid core commerce model, Alibaba has been guzzling data that it is in an increasingly better position to use for improving customer experience and feeding its AI initiatives.
  • Alibaba is working on the development of what it calls “New Retail” to bridge the gap between online and offline shopping using its big data capacity. It expects that the system will offer brick-and-mortar retailers new ways to evolve across marketing, inventory and distribution networks. These look promising and will not only reshape the retail landscape but also help Alibaba fend off competition.
  • BABA quarterly revenue growth was 36.90%, higher than the industry and sector average revenue growth (7.39% and 1.83%, respectively). See BABA revenue growth chart.
  • BABA forward P/E ratio is 19.05, which is low compared to its industry peers’ P/E ratios. See BABA forward P/E ratio chart.
  • BABA Price/Book ratio is 0.61, which is low compared to its industry peers’ P/B ratios. See BABA forward Price/Book ratio chart.
  • BABA Price/Sales ratio is 0.90, which is low compared to its industry peers’ P/S ratios. See BABA forward Price/Sales ratio chart.
  • BABA PEG ratio (P/E adjusted for growth) is 41.61, which is low compared to its industry peers’ PEG ratios. See BABA PEG chart.
  • BABA average analyst rating is Strong Buy. See BABA analyst rating chart.
  • BABA Enterprise Value/Revenue multiple is 0.68, which is low compared to its industry peers’ Enterprise Value/Revenue multiples. See BABA Enterprise Value/Revenue chart.

6. What are the reasons to sell BABA? Why should I sell BABA stock?

Let's look at the reasons to sell BABA stock (i.e., the bear case):

  • Alibaba's corporate structure entails certain risks because of the Chinese laws. According to those, it is illegal for a foreigner to own stocks in any Chinese Internet company, which implies that a foreign investor cannot be a real stockholder in Alibaba. Therefore, all foreign investors who bought Alibaba shares on the NYSE actually purchased stocks of the holding company called Alibaba Group Holding Ltd registered in the Cayman Islands and not that of the actual Alibaba.
  • Alibaba completed a number of acquisitions over the past year and while these acquisitions are augmenting its key capabilities and enabling it to expand both in China and internationally, integration risks remain. Moreover, the acquired businesses bring additional costs that are likely to add to its costs in the near term.
  • Alibaba is already facing tough competition from the likes of Tencent Holdings. As the company continues to expand into the U.S., it will increasingly be up against well established competitors such as eBay and Amazon. Also, Alibaba competes with PayPal on the mobile payment system front.
  • BABA profitability is declining. The YoY profit margin change was -2.32 percentage points. See BABA profitability chart.
  • BABA short interest (days to cover the shorts) ratio is 2.52. The stock garners more short interest than the average industry, sector or S&P 500 stock. See BABA short interest ratio chart.

Key Stats

7. What are BABA key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for BABA:

If you liked this analysis, check out Stock Guides for other stocks.

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