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Alibaba stock is down nearly 50% since all-time high last October
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese multinational technology company that specializes in e-commerce, retail, internet, and technology. BABA provides consumer-to-consumer, business-to-consumer, and business-to-business sales services via web portals, as well as electronic payment services, shopping search engines and cloud computing services. Alibaba also owns and operates a diverse portfolio of companies around the world in numerous business sectors. This morning, BABA was last seen trading down 1% at $167.44.
Alibaba stock has decreased in price by about 40% year-over-year, but has backpedaled 47% since hitting its all-time high of $319.32 last October. Additionally, shares of BABA have decreased 26% year-to-date and are up just 11% from last week's two-year low of $152.80. Long-term pressure has stemmed from the overhead 80-day moving average.
On the earnings front, Alibaba has beat earnings expectations on three of its last four quarterly earnings reports. For Q3 of 2020, BABA beat analyst estimates by a margin of $0.15, reporting an EPS of $2.21. For Q4 of 2020, Alibaba beat expectations by a margin of $0.60, reporting an increased EPS of $2.78. For Q1 of 2021, BABA outperformed estimates by a margin of $0.17, reporting another increase in EPS up to $3.35 For Q2 of 2021, in the most recent quarterly report, Alibaba reported an EPS of $1.59 and missed expectations by a margin of $0.13. Meanwhile, Wall Street is expecting to see massive earnings growth from Alibaba with an estimate of $14.43 EPS for its third quarter.
From a fundamental point of view, BABA has displayed incredible growth for many years now, increasing revenue. In addition, Alibaba stock’s bearish run over the past year has provided a great opportunity for investors to buy BABA at great valuation.
At a market cap of $458 billion, investors will have a hard time finding another company of a similar size with such a low price-earnings ratio like 20.43. Alibaba stock also has a forward price-earnings ratio of 17.70, further proving it to be a bargain. Overall, BABA has potential for value and growth investors alike, considering the Alibaba's business model, growth rate, current sales volume, and potential to continue rapid expansion.