Key Factors to Evaluate Before Investing in Alibaba (BABA)

By Chris Stiles • Thursday, September 26 16:00 • Permanent Link

Shares of Business Services company Alibaba jumped 10.0% today. With many investors piling into BABA without a second thought, it may be a good idea to take a closer look at the stock. Here are some quick facts to get you started:

Alibaba has moved 11.6% over the last year, and the S&P 500 logged a change of 33.1%
BABA has an average analyst rating of buy and is -3.17% away from its mean target price of $108.47 per share
Its trailing earnings per share (EPS) is $3.97
Alibaba has a trailing 12 month Price to Earnings (P/E) ratio of 26.5 while the S&P 500 average is 28.21
Its forward earnings per share (EPS) is $10.0 and its forward P/E ratio is 10.5
The company has a Price to Book (P/B) ratio of 0.27 in contrast to the S&P 500's average ratio of 4.71
Alibaba is part of the Consumer Discretionary sector, which has an average P/E ratio of 22.15 and an average P/B of 3.11
BABA has reported YOY quarterly earnings growth of -25.7% and gross profit margins of 0.4%
The company has a free cash flow of $142.87 Billion, which refers to the total sum of all its inflows and outflows of cash over the last quarter
Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao and Tmall, which are digital retail platforms; Alimama, a proprietary monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.