Alibaba stock analysis – undervalued

Alibaba Group, founded by the charismatic entrepreneur Jack Ma, has been a force to reckon with in e-commerce, cloud computing, digital media, and more. But recent regulatory changes in China have brought new challenges

Alibaba is a Chinese multinational technology company that specializes in e-commerce, retail, cloud computing, and artificial intelligence. The company was founded in 1999 by Jack Ma and is headquartered in Hangzhou, China. Alibaba is one of the largest companies in the world, with a market capitalization of over $200 billion.

The company’s businesses include:

  • Taobao: A consumer-to-consumer (C2C) marketplace that allows individuals to sell goods and services to each other.
  • Tmall: A business-to-consumer (B2C) marketplace that allows businesses to sell goods and services to consumers.
  • A business-to-business (B2B) marketplace that allows businesses to buy and sell goods and services to each other.
  • Alibaba Cloud: A cloud computing platform that provides businesses with a variety of cloud computing services.
  • Ant Financial: A financial technology company that provides a variety of financial services, including payments, lending, and insurance.

Alibaba is a well-managed company with a strong track record of growth. The company is facing some challenges, such as the ongoing trade war between the United States and China, but its management team is confident that Alibaba will continue to grow in the future.

Financial performance

Alibaba’s revenue dropped by 6% in 2022, marking the first decrease since 2012. The decline is attributed to a weakening global economy, tighter regulation by the Chinese government, disruptions from the COVID-19 pandemic, and new competition from rivals like Pinduoduo and Douyin.

The government’s crackdown on Alibaba’s monopoly power and the emergence of more innovative, lower-priced competitors have particularly affected its market share.

Despite the revenue decline, Alibaba remained highly profitable, with a net profit of $14.2 billion in 2022. The situation emphasizes the challenges the company must navigate to sustain growth in the future.

financial statistics for Alibaba:

  • Market capitalization: $233.38 billion
  • Enterprise value: $187.62 billion
  • Trailing P/E ratio: 25.27
  • Forward P/E ratio: 10.93

Overall, Alibaba’s financial performance has been strong over the past five quarters. The company is growing its revenue and net income, and its EPS is increasing. This suggests that Alibaba is a well-managed company that is on track for continued growth in the future.

Alibaba’s growth revenue and stock price are being driven by a number of factors, including:

  • The growth of the Chinese e-commerce market.

The Chinese e-commerce market is one of the largest and fastest-growing markets in the world. Alibaba is a major player in this market, and the company is well-positioned to benefit from its growth.

  • The expansion of Alibaba’s businesses into new markets

Alibaba is a major player in the global e-commerce market. Alibaba is also expanding its reach into other markets, such as Southeast Asia and Latin America. These markets are growing rapidly, and Alibaba is well-positioned to capitalize on this growth.

  • The company’s investments in new technologies, such as cloud computing and artificial intelligence.

These technologies have the potential to revolutionize the way businesses operate, and Alibaba is well-positioned to benefit from this revolution.

Analysts’ recommendations

Analysts on Wall Street are bullish on Alibaba stock. According to a recent survey of analysts by, Alibaba has an analyst consensus of Strong Buy, with a price target consensus of $142.71. This implies a 43.0% upside from current levels.

Alibaba strength

  • Strong financial performance: Alibaba has been growing its revenue and net income steadily over the past few years.
  • Large and growing market: The Chinese e-commerce market is large and growing, and Alibaba is a major player in this market.
  • Diversified businesses: Alibaba has a diversified portfolio of businesses, which helps to reduce its risk.
  • Strong management team: Alibaba has a strong management team with a proven track record of success.

Alibaba  Risks

There are some risks associated with investing in Alibaba stock. These include:

  • Competition: Alibaba faces increasing competition from other Chinese tech companies, such as Tencent and
  • Political risk: China has a history of intervening in the tech sector, and this could pose a risk to Alibaba.
  • Regulation: Alibaba is facing increased regulatory scrutiny in China, which could impact its business.

Alibaba and other Chinese technology companies faced increased regulatory scrutiny from the Chinese government throughout 2020 and 2021. New regulations targeted areas such as monopolistic practices, data security, and financial technology. In particular, the suspension of Ant Group’s IPO in November 2020, a financial affiliate of Alibaba, was a high-profile incident reflecting this trend. Alibaba’s share price and business operations were affected by the evolving regulatory environment.

The company’s founder, Jack Ma, is one of China’s most prominent entrepreneurs. He stepped down as the company’s chairman in September 2019, although he remained involved with the Alibaba Group.

Alibaba’s journey is a testament to the dynamic and ever-changing world of technology and finance. As always, please consult with a financial professional before making any investment decisions. If you found this video helpful, don’t forget to like, subscribe, and hit that notification bell for more insights. Until next time, happy investing