Alibaba's Shares Significantly Underestimated, Anticipated to surge by 60%
Heyo! Alibaba's stocks, BABA, have surged 34.1% this year, but they're still a hot pick! With a low forward price-earnings (P/E) ratio of just 12.2x and expected 19.5% growth in earnings per share (EPS) by 2026, BABA could be a goldmine!
Curious about how it stacks up against Amazon? Well, Alibaba's P/E and price-sales (P/S) multiples are a mere 12.2x and 2.09x, respectively, compared to Amazon's hefty 34.5x and 3.55x. Looks like BABA's undervalued!
Whoa, things are picking up for Alibaba! Its growth engine is revving, thanks to soaring demand for artificial intelligence (AI) technologies in its cloud division and improvements in customer experience on its e-commerce platforms. Gotta love those AI-powered cloud services! The Street's even got a whopping $180 price target for BABA stock, suggesting a massive potential 60% upside!
Let's dive deeper:
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What's up with Alibaba's core businesses? Taobao and Tmall, its e-commerce platforms, observed a fantastic 12% growth in customer management revenue (CMR). Improved take rates, due to software service fees and Quanzhantui adoption, significantly contributed to this growth. As for the cloud business, it's been thriving, with an 18% revenue surge thanks to soaring demand for public cloud services.
AI is still the Golden Goose for Alibaba. Its AI-related revenue has posted whopping 100% growth for the seventh straight quarter! AI adoption is no longer limited to digital-native sectors but is expanding like wildfire across several traditional verticals, including manufacturing.
Alibaba's international business is shining too. AIDC, its international digital commerce arm, is booming due to the strength of cross-border commerce. The company is honing its strategies to cater better to local market demands and boost operational efficiency amid challenging macro and geopolitical conditions.
Cost management and enhanced productivity? Alibaba's got that covered! Each segment of the business posted year-over-year EBITA gains in the recent quarter, helping lift group-level EBITA by a whopping 36%. Some previously loss-making operations are even on track to break even!
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Analysts are all bullish on BABA stock! They've slapped a "Strong Buy" rating on it and their average price target hovers around $159.55. That's massive potential upside!
TL;DR: Alibaba's still stealing the show this year, with strong fundamentals, growing core businesses, and a low valuation. It looks like a juicy investment with potential upside to reach the $180 mark sooner than many expect!
Investing in Alibaba (BABA) could be a promising choice for finance enthusiasts, given its anticipated 19.5% growth in earnings per share (EPS) by 2026 and a low forward price-earnings (P/E) ratio of just 12.2x. Furthermore, the technology sector, particularly Alibaba's cloud division, is experiencing significant growth due to increasing demand for artificial intelligence (AI) technologies, making BABA an intriguing pick for those interested in technology-driven investments.
