Alibaba Stock Analysis, Valuation (NYSE:BABA)
Alibaba Stock Analysis
Alibaba’s revenue has climbed ever higher as the company puts all its efforts to expand its topline. This has led to massive infrastructure creation causing Alibaba’s assets to baloon. Alibaba’s stock analysis shows that while Alibaba's revenue growth makes the stock attractive, its expensive valuations make it risky. And unlike other fast growing ecommerce firms Alibaba has solid profit margins.
Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.
Alibaba Group Holding Ltd Stock Rating 3/5
Should you buy BABA stock?
- The Year Over Year (YoY) revenue growth for Alibaba was 66.4% in 2018 Q3.
- The TTM operating margin was good at 30.8% for Alibaba.
- LTM Net margins were good at 29.6% for Alibaba.
- With a debt/equity ratio of 0.3, Alibaba is comparatively less leveraged than its peers in the Retail-Wholesale sector.
- The operating cash flow looks good at 2.3 times the net income.
- Alibaba's return on invested capital of 20.3% is good.
- The LTM ROE of 19.2% for Alibaba is attractive.
- The company has a healthy free cash flow margin of 67.9%.
Should you sell BABA stock?
- BABA stock is trading at a PE ratio of 49.8, which is worse than the industry average multiple of 20.8.
- The company is trading at a price to sales multiple of 13.8, which is overvalued in comparison to the Internet Commerce industry average multiple of 0.8.
Alibaba Related Company Stock Videos
Alibaba’s stock price has fluctuated also based on the perceived strengths and weaknesses of the Chinese economy as majority of its revenues come from China. Alibaba stock price history shows that the stock saw a steep decline in 2015 when the concerns around Chinese economy were at its peak. The stock later recovered when the concerns around Chinese economy receded. Alibaba has managed a very high revenue growth rate in spite of its size. Alibaba is also expanding in to areas which will boost profits.
Alibaba PE ratio chart shows that the stock is expensive. Alibaba is also expanding in to cloud computing through Aliyun and payments through Ant Financials.