BABA stock fell 8% on the news, and the pressure from both the central government and investors was just beginning. In late October of 2020, Ant Group, of which Alibaba owned 33%, announced plans for its initial public offering. When the deal was priced, it was set to be the largest IPO in history. The listing promised to set a value on one of Alibaba’s most valuable investments—which https://dotbig.com/markets/stocks/BABA/ would, based on public market listings, be worth at least $100 billion—while also bringing in capital for growth. Investors can refer to the above chart and observe the “irrationality” of the market over BABA valuation. Street analysts have de-rated BABA stock consistently over the past year, but BABA stock’s NTM FCF yield has continued to improve markedly.
Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. This article represents https://www.dukascopy.com/swiss/english/forex/trading/ the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service.
Alibaba Stock Forecast
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- A few months ago, state media released a documentary that showed Jiangyong leveraging his relationship with Chinese tech companies to support his younger brother’s business.
- Finally, as the second-biggest e-commerce company globally, Alibaba has been affected by ongoing inflationary pressures.
- In 2007, the company went public on the Hong Kong stock exchange.
- In less than 17 months, shares incredibly lost more than three-quarters of their value.
- Alibaba subsidiary ANT Group has also reportedly eliminated its stake in 36KR Holdings to try and comply with regulations.
- For those willing to take on extra risk, the Chinese equity market’s recent correction provides investors with undervalued opportunities.
Investors in Alibaba have minimal assurance that they will ever receive those cash flows. Citi was quick to note that this does not indicate that Alibaba is issuing new shares (so don’t worry about stock dilution). As a growth-oriented investor myself, I am aware of the challenges investors face in their quest to find the right growth stocks. As these are emerging leaders, the due diligence required is even more crucial. Unfortunately, most could hardly find the time to do the necessary work. Therefore, we can surmise that the fear in BABA stock price is still at a high level, given its FCF yield.
JD.com reported adjusted earnings per share of $0.35 cents on revenue of $43.6 billion. EPS was ahead by $0.08, and revenue beat estimates by about $300 million. Revenue grew by about 23% YoY, however, which was the slowest rate of growth in six quarters. This is significant since Alibaba’s revenue growth slowed in the fourth quarter as well. The thinking goes that if Alibaba’s sleeker, younger competitor is slowing as well, then there may not be much Alibaba’s managment can do to accelerate the ecommerce giant’s growth trajectory. Forex news fell 7.9% to $92.92 on Thursday after the US Securities & Exchange Commission announced the possible delisting of five Chinese companies that trade as American Depositary Receipts on US exchanges.
In addition, it has allowed me to develop a clear understanding of how institutional investors play their game. Covid Forex news has reared its ugly head in China again and the prospect of US desisting for Chinese stocks is ever-present.