Followers | 680 |
Posts | 141228 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Wednesday, June 23, 2021 9:49:23 AM
By: TipRanks | June 23, 2021
Alibaba (BABA) stock has been on a rough ride in recent months. Since hitting a peak of nearly $320 per share late last year, shares have seen a drop of nearly 50% from these highs. For such an incredible growth stock, this drop is one that has many investors scratching their heads.
Of course, there are reasons that Alibaba and its growth peers have struggled of late.
Late last year, it was announced that the much-anticipated IPO of its Ant Financial subsidiary was delayed. Ant Financial was also forced to restructure, causing significant value destruction for investors. These concerns arrived on top of delisting rhetoric, which has heated up in recent months.
Additionally, in April, Alibaba was slapped with a $2.8 billion fine as a result of a Chinese government crackdown on monopolistic behaviors at Alibaba. This fine caused the company to post its first-ever loss as a publicly-traded company. Accordingly, investors saw selling pressure in BABA stock pick up in recent months. (See Alibaba stock chart on TipRanks)
Indeed, Alibaba seems to be under pressure from the Chinese government. Those bearish on Alibaba have made good money short-selling this company and highlighting these concerns of late.
However, there’s a reason why many investors are buying this dip. Let’s dive into what Alibaba does, and why this current price may be a great entry point for long-term growth investors right now.
Alibaba’s Business Model Enticing for Growth Investors
E-commerce is where many investors want to stay invested over the long-haul. That's for good reason.
For Chinese mega-cap e-commerce player Alibaba, the comparison to the business models of a range of American companies are valid. Indeed, Alibaba has most notably been referred to as the “Amazon (AMZN) of China,” though the company’s core businesses span a range of other consumer spending and technology sectors.
E-commerce is one sector with some very powerful long-term tailwinds that growth investors have enjoyed riding in recent years. Those hoping Alibaba can eventually match (or even surpass) Amazon’s dominant performance have reason to like this stock right now. After all, Alibaba trades at a fraction of the valuation of its American counterpart presently.
Accordingly, perhaps a more astute comparison would be to call Alibaba the Amazon, PayPal (PYPL), and Ebay (EBAY) of China. Indeed, the company’s e-commerce presence is large. However, to understand the totality of the company’s overall business, it’s important to take a look at everything the company does.
For those who haven’t used Alibaba or its Alipay service via its stake in Ant Financial, it’s difficult to wrap one’s head around how big Alibaba really is. In the Chinese market, it’s an absolute behemoth. With Alibaba capturing so much of the value it creates with every transaction, it’s easy to understand why long-term investors focus on this mega-cap tech name.
What Analysts Are Saying About BABA Stock
According to TipRanks’ analyst rating consensus, BABA stock comes in as a Strong Buy. Out of 26 analyst ratings, there are 25 Buy recommendations and 1 Hold recommendation.
As for price targets, the average analyst Alibaba price target is $301.60. Analyst price targets range from a low of $270.00 per share to a high of $350.00 per share.
Bottom Line
Alibaba’s recent woes are certainly noteworthy, and have caused tremendous concern among investors of late. However, those willing to fight some near-term volatility may be well-rewarded by the long-term upside BABA stock provides.
Earlier this year, it was reported that value investor Charlie Munger had recently acquired a relatively large stake in Alibaba through the Daily Journal Corp (DJCO). This sizable investment accounted for roughly 19% of Munger’s overall portfolio. As serious investors know, Mr. Munger only buys companies he thinks hold tremendous value and long-term growth prospects. He also doesn’t enter and exit stocks frequently. Rather, he’s a long-term buy-and-hold investor.
Indeed, this purchase is a big vote of confidence for those holding Alibaba right now, especially considering Munger’s cost base is likely substantially higher than current prices. That’s assuming he hasn’t averaged down this quarter.
Accordingly, it appears some of the greatest investors of all time are holding true to their view that Alibaba holds tremendous value at these levels. While many of the concerns the market has with Alibaba are certainly pertinent in the short-term, there’s also reason to believe these simply represent noise in the markets.
Long-term investors could do well if they drown out the noise and buy this stock when it’s unfavorable. After all, that’s what Charlie Munger is doing.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent BABA News
- Alibaba Group Will Announce March Quarter 2024 and Full Fiscal Year 2024 Results on May 14, 2024 • Business Wire • 04/30/2024 09:00:00 AM
- Alibaba.com Unveils Affordable, Customizable Logistics Solutions for U.S. SMEs • PR Newswire (US) • 04/17/2024 02:00:00 PM
- Delta Generates US$37 Million Profit in Q1, Google and Intel Unveil Cutting-Edge AI Chips, and More News • IH Market News • 04/10/2024 11:13:48 AM
- Boeing Down in Pre-Market Due to CEO Developments and Denver Incident; MicroStrategy Surges 11% with BTC Spike, and More • IH Market News • 04/08/2024 11:17:49 AM
- Cal-Maine Surges on Strong Quarterly Performance, Taiwan Earthquake Disrupts Tech Supply Chain, and More • IH Market News • 04/03/2024 11:12:20 AM
- Walgreens Slashes Annual Profit Forecast; MillerKnoll Nosedives 17% on Bleak 4Q Outlook, and Latest News • IH Market News • 03/28/2024 01:48:04 PM
- AliExpress becomes the first exclusive e-commerce partner of UEFA EURO 2024™ • PR Newswire (US) • 03/27/2024 02:35:00 PM
- AliExpress becomes the first exclusive e-commerce partner of UEFA EURO 2024™ • PR Newswire (Canada) • 03/27/2024 02:16:00 PM
- AliExpress becomes the first exclusive e-commerce partner of UEFA EURO 2024™ • PR Newswire (US) • 03/27/2024 02:16:00 PM
- Alibaba Group Cainiao IPO Update and Share Purchase Offer Conference Call • Business Wire • 03/26/2024 10:40:00 AM
- Crypto: AIOZ Network Partners with Alibaba Cloud, Google Integrates ENS Domain Balances, and Key Updates • IH Market News • 03/22/2024 05:32:29 PM
- FedEx Soars 13% with Profits Above Forecasts, Nike Hit by China Slowdown, and Latest News • IH Market News • 03/22/2024 01:07:53 PM
- Alibaba.com Witnesses Notable Increase in U.S.-Based SME Buyers During Its Annual March Expo • PR Newswire (US) • 03/21/2024 02:00:00 PM
- Apple Pre-Market Drop Due to Antitrust Threats, Surprising Profit Boosts Micron Shares, and Latest Market Updates • IH Market News • 03/21/2024 11:17:26 AM
- Alibaba.com Records Strong Growth in the Number of UK SME Buyers at This Year's March Expo • PR Newswire (US) • 03/21/2024 09:30:00 AM
- Unilever Initiates Ice Cream Division Spin-Off and Announces Job Cuts; Berkshire Ramps Up Share Buyback Efforts, and More • IH Market News • 03/19/2024 11:33:10 AM
- AliExpress Levels Up Experience for U.S. Customers with Updated Shopping Guarantees and a Redesigned Mobile App • PR Newswire (US) • 03/18/2024 02:49:00 PM
- Apple & Google in Talks for Gemini AI on iPhone, Nvidia’s GTC Conference Today, and Latest News • IH Market News • 03/18/2024 11:10:46 AM
- Adobe Stock Drops Following Below-Estimate Projections, Cardlytics Surges with Unexpected Profit, and More News • IH Market News • 03/15/2024 11:30:55 AM
- Sam Altman Rejoins OpenAI Board; Coinbase, MicroStrategy Surge Pre-Market Amidst Bitcoin’s Latest Milestone • IH Market News • 03/11/2024 10:39:03 AM
- CNOOC Oil Field Discovery in South China Sea, Grifols Surges 18% After KPMG Approval, and Latest News • IH Market News • 03/08/2024 11:19:59 AM
- Alibaba Releases Report on Cross-Border Trade's Positive Impact on the U.S. Economy • PR Newswire (US) • 03/06/2024 11:00:00 AM
- Alibaba.com's Annual March Expo Highlights Small Business Sourcing Trends and Rolls Out More Guaranteed Services • PR Newswire (US) • 02/29/2024 03:29:00 PM
- AliExpress Marks Choice Anniversary with Deals and New Ambassadors • PR Newswire (US) • 02/29/2024 08:07:00 AM
- AliExpress Marks Choice Anniversary with Deals and New Ambassadors • PR Newswire (US) • 02/29/2024 08:01:00 AM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM