This Chinese eCommerce Stock is Undervalued

Alibaba GroupThere was fear at the end of last week that the United States Department of Treasury was planning to delist Chinese stocks from U.S. markets. The Treasury then released a statement on Sunday, reassuring investors that it was considering no such move, leaving Chinese investments open to Americans.

One of these investments, Alibaba Group Holdings Ltd. (NYSE: BABA), could see a significant upside thanks to the news and other key factors. This company is an eCommerce retailer and wholesaler and can be best summed up as China’s answer to Amazon. It also offers technology services in its market.

Alibaba is one of China’s fastest growing companies and it has generated strong double-digit revenue growth for five consecutive years. At the end of the company’s 2019 fiscal year it reported 48.69% in revenue growth for a total of $56.15 billion. Income increased 16.87% in the same period and executives reported a gross profit margin of 43%. All of this can inspire confidence in new investors.

For the current fiscal year, the target of $69.9 billion in revenue looks reachable.

The analyst estimates for a long-term target on this stock are high. The average target price of $1,574 is taken from the ratings of 53 analysts recorded on FactSet. 47 of these analysts place a BUY rating on this stock. Impressive revenue growth and a strong potential upside make this a pick to watch.

Key Data:

  • 1 Year Price Growth: 71%
  • YTD Price Growth: 49%
  • 3 Month Price Growth: -5.45%

All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.

You May Also Like

About the Author: Writocity