My Portfolio
My Watchlists
Profile & Performance
Smart Portfolio
Find & Follow Experts
Top Lists
Top Experts
Make Better, Data Driven Investment Decisions
TipRanks tools are all you need to make data-driven investment decisions. Conduct comprehensive stock research, find new investment ideas, analyze your portfolio, and follow the best-performing Wall Street experts, with ease.
About Us
Plans & Pricing

Alibaba Stock: Headwinds Appear Temporary

I am bullish on Alibaba (BABA). The stock has sunk 32.3% over the past six months, presenting a good opportunity for buy-the-dip investors.

Alibaba is a leading B2B and B2C e-commerce company. The global e-commerce industry’s market size this year is $4.9 trillion, and is expected to reach $7.4 trillion in 2025.

Alibaba is currently trading at a 51% “discount” from its 52-week high of $319.32, suggesting that this could be a good time to go long on the stock. (See Alibaba’s stock charts on TipRanks).

BABA Is Undervalued

Alibaba deserves a spot in your long-term growth-at-reasonable-price, or GARP, portfolio. This stock’s forward P/E ratio is only 13.7x.

That’s lower than Amazon (AMZN) 51.2x, Etsy (ETSY) 59.9x, and Shopify (SHOP) 226.5x.

GARP investors should exploit this asymmetrical bias against Alibaba.

China Headwind is Temporary

Investors are overreacting to Alibaba’s regulatory problems as co-founder Jack Ma will eventually be forgiven by President Xi Jinping.

BABA’s Stochastic Oscillator score is 49.7. This technical indicator is hinting that investors are undecided, or on the sitting-on-the-fence mode.

Alibaba is Very Profitable

Based on the chart below, BABA deserves more love from investors. Its EBITDA margin is 20%, gross margin is 40%, and net income margin is 19.25%.  Alibaba has better profitability stats than Amazon.

(Source: Motek Moyen)

The growing profitability of Alibaba is why it has a Piotroski F Score of 7. This categorizes it as a strong value stock.

Wall Street’s Take

Wall Street analysts consider Alibaba a Strong Buy, based on 22 Buys, one Hold, and one Sell. The average BABA price target is $269.18, implying 73.5% upside potential.


Hyper-growth attributes, and growing profitability make Alibaba a very attractive investment.

This company’s undervaluation relative to its peers is an opportunity warrants attention.

Disclosure: At the time of publication, Motek Moyen did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.