Alibaba: Major Declines Create Buying Opportunity

Seeking Alpha11-20 23:50

I am upgrading Alibaba to a "strong buy" due to stable quarterly earnings figures and Chinese government stimulus measures aimed at boosting economic growth.Alibaba's net income surged 58% annually, ...

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Brrnie
11-20 18:20
Brrnie
Same story for three years. Scam stock

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Growth in our Cloud business accelerated from prior qua","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":["rate"],"viewcount":null,"language":"en","relate_stocks":{"BABA":"阿里巴巴","09988":"阿里巴巴-W"},"translate_title":"阿里巴巴-SW：大幅下跌创造买入机会","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"09988":0.9,"BABA":0.9},"content_text":"I am upgrading Alibaba to a \"strong buy\" due to stable quarterly earnings figures and Chinese government stimulus measures aimed at boosting economic growth.Alibaba's net income surged 58% annually, driven by equity investments, while cloud segment revenues grew 7%, showing strength in AI and cloud services.Despite mixed earnings, Alibaba's valuation metrics, particularly price-book ratio, indicate it remains attractively valued compared to industry peers.Recent price declines suggest limited downside, with support likely near $81.60, making BABA a compelling long-term growth investment.Robert WayWhen I last covered Alibaba Group (NYSE:BABA) on October 12th, 2024 with my article “Alibaba: Buy The Pullback”, the stock was in the process of breaking out of a prolonged trading range that had been in place since January 2022. Broadly speaking, my article thesis revolved around the idea that BABA stock was currently undervalued in relation to its industry peer grouping. Since then, the stock has been influenced by significant updates that have fundamentally changed the outlook. As a result, I will be raising my outlook for this stock to a “strong buy” rating, with the expectation that BABA shares can still make sizable moves upward before the end of this year.Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)In addition to posting surprising quarterly earnings figures, the stock has also been impacted by stimulus measures that have been enacted by the Chinese government, which include a 1.4 trillion yuan plan that will be carried out over the next five years and is designed to energize stagnating growth rates in China and make improvements within the country’s dramatically weakened real estate markets. For the quarter ending in September, Alibaba posted somewhat mixed results with adjusted earnings of $2.08 per share and this figure was a slight beat of 1.62% relative to consensus estimates. However, Alibaba’s quarterly revenue figure missed consensus estimate by -1.23% (coming in at $32.7 billion). Despite missing market expectations, Alibaba’s revenue figure actually indicates annualized gains of 5%, while the quarterly EPS figure points to annualized declines of -4% for the period.Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)Overall, the quarterly figures that stand out the most in the report can be found in Alibaba’s net income, which came in at $6.07 billion and surpassed consensus expectations by an incredible amount (69.96%). Ultimately, these figures indicate annualized growth rates of 58% and were driven primarily by strength in Alibaba’s equity investments. In discussing these quarterly performances, Alibaba CEO Eddie Wu explained:This quarter… we entered into long-term collaborations with industry peers to broaden payment and logistics services on Taobao and Tmall platforms, which we expect will accelerate our overall growth. Growth in our Cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth. We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth. Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses.Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)One more remarkable aspect of Alibaba’s most recent earnings report can be found in the quarterly performances within the cloud segment, where revenues came in at nearly $4.1 billion and indicated annualized growth rates of 7%. Fortunately, this performance marked a minor increase from the 6% annualized gains posted during the prior quarter, and this shows that Alibaba’s plans to fortify its cloud infrastructure and gain market share in both artificial intelligence and cloud services. In large part, these efforts have been hindered by the Chinese government's efforts to clamp down on leading technology companies, in moves that reached heights in 2022. In the periods that followed, Alibaba has had to make significant changes in leadership roles in several areas and engage in strategic moves to promote growth through focused competition with Chinese rivals as a way of navigating through rising challenges within the domestic economic framework.Alibaba: Comparative Forward Price to Earnings Valuations (YCharts)Generalized weaknesses in the Chinese economy with respect to e-commerce and consumer spending on China’s mainland have created situations where several retailers in the region have recently reported lackluster quarterly earnings results. One other example is JD.com, Inc. (JD) and recent declines in share prices have sent shares of the stock to a lower forward price-earnings ratio of 8.737x. Of course, this is firmly below Alibaba’s current forward price-earnings ratio (which now stands at 10.54x). Clearly, these weaker valuations have become a trend within the industry because roughly similar metrics can be seen in PDD Holdings, Inc. (PDD), which is currently trading with a forward price-earnings multiple of 9.781x. Interestingly, we can compare this to a U.S. e-commerce retailer like Amazon.com, Inc. (AMZN), which trades with a much higher forward price-earnings ratio of 39.55x. But it should also be noted that there are still similar North American companies within the same competing industry peer that are trading at much lower valuations. Two of my favorite options with lower current valuations would be eBay Inc. (EBAY) at 12.7x and Etsy, Inc. (ETSY) at 11.08x.Alibaba: Comparative Forward Price to Sales Valuations (YCharts)If we change the valuation metric and use the forward price-sales ratio, Alibaba starts to look more favorable within this industry peer grouping (at 1.507x) because PinDuoDuo is trading at nearly twice the valuation (at 2.813x). Conversely, JD.com is still much cheaper (at 0.325x) but the North American stocks are significantly more expensive, with Amazon now seen with a forward price-sales ratio of 3.332x. Somewhat similar metrics for eBay can be seen at 2.863x, but Etsy is currently trading at much lower valuations at 1.981x.Alibaba: Comparative Forward Price to Book Valuations (YCharts)In Alibaba’s case, price-book ratios arguably offer the most favorable valuation metric because the company is currently trading at just 1.642x book value. In this case, both JD.com (at 1.687x) and PinDuoDuo (which is much higher, at 4.531x) are trading at more expensive valuations at the moment. North American counterparts are currently looking far less attractive using this valuation basis, as Amazon is trading with an elevated price-book ratio of 8.199x, while eBay is seen at 5.432x and Etsy trades massively higher (with a jaw-dropping price-book valuation of 22.11x). On balance, I think this broader valuation metric gives us the best sense of Alibaba’s current position relative to key competitors within the industry, and I think these trends show us that Alibaba remains attractively valued at the moment.Alibaba: Major Declines & Key Price Levels (Income Generator via TradingView)In addition to potential overvaluation risks that can be seen when analyzing Alibaba on the comparative basis of its forward price-earnings metrics, recent price moves in shares of BABA show possible warning signals for long trades taken near current levels. Specifically, the stock has recently fallen through the 61.8% Fibonacci retracement of the bullish rally from the June 24th, 2024 lows of $71.80 to the October 7th, 2024 highs of $117.82 (which is located above $89.30). Additionally, the stock’s 200-period exponential moving average on the 4-hour timeframe was also broken during this recent price decline, and this suggests that BABA might still fall further before finding support. To the downside, I will next be watching for a possible test of the 78.6% Fibonacci retracement of the aforementioned price move (which currently rests below $81.60). Fortunately, stochastic indicator readings are currently holding at oversold levels, and this ultimately suggests that share prices are likely to start finding support relatively soon. As a result, I think that further declines might be limited, and I believe that the stock’s attractive relative price-book valuations are supported by the longer-term growth prospects that continue to develop within Alibaba’s recent quarterly earnings reports. For these reasons, I will continue holding my long position and I expect to see the stock rally to new near-term highs before the end of the year.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":373017292001288,"gmtCreate":1732098051395,"gmtModify":1732098055167,"author":{"id":"3569189138119123","authorId":"3569189138119123","name":"Brrnie","avatar":"https://static.tigerbbs.com/535df402960cd7d1f41b24d9f5d687b7","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3569189138119123","authorIdStr":"3569189138119123"},"htmlText":"Same story for three years. Scam stock&nbsp;","listText":"Same story for three years. Scam stock&nbsp;","text":"Same story for three years. Scam stock","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/373017292001288","repostId":2484942498,"repostType":2,"repost":{"id":"2484942498","pubTimestamp":1732117800,"share":"https://ttm.financial/m/news/2484942498?lang=&edition=fundamental","pubTime":"2024-11-20 23:50","market":"us","language":"en","title":"Alibaba: Major Declines Create Buying Opportunity","url":"https://stock-news.laohu8.com/highlight/detail?id=2484942498","media":"Seeking Alpha","summary":"we entered into long-term collaborations with industry peers to broaden payment and logistics services on Taobao and Tmall platforms, which we expect will accelerate our overall growth. Growth in our Cloud business accelerated from prior qua","content":"<html><head></head><body><ul style=\"\"><li><p>I am upgrading Alibaba to a &#34;strong buy&#34; due to stable quarterly earnings figures and Chinese government stimulus measures aimed at boosting economic growth.</p></li><li><p>Alibaba&#39;s net income surged 58% annually, driven by equity investments, while cloud segment revenues grew 7%, showing strength in AI and cloud services.</p></li><li><p>Despite mixed earnings, Alibaba&#39;s valuation metrics, particularly price-book ratio, indicate it remains attractively valued compared to industry peers.</p></li><li><p>Recent price declines suggest limited downside, with support likely near $81.60, making BABA a compelling long-term growth investment.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/bb459413c0d6682ec811f5128f1e7365\" alt=\"Robert Way\" title=\"Robert Way\" tg-width=\"750\" tg-height=\"500\"/><span>Robert Way</span></p><p>When I last covered Alibaba Group (NYSE:BABA) on October 12th, 2024 with my article “Alibaba: Buy The Pullback”, the stock was in the process of breaking out of a prolonged trading range that had been in place since January 2022. Broadly speaking, my article thesis revolved around the idea that BABA stock was currently undervalued in relation to its industry peer grouping. Since then, the stock has been influenced by significant updates that have fundamentally changed the outlook. As a result, I will be raising my outlook for this stock to a “strong buy” rating, with the expectation that BABA shares can still make sizable moves upward before the end of this year.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/1a883c450ecf934d93edd5187e27678e\" alt=\"Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)\" title=\"Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)\" tg-width=\"1280\" tg-height=\"303\"/><span>Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)</span></p><p>In addition to posting surprising quarterly earnings figures, the stock has also been impacted by stimulus measures that have been enacted by the Chinese government, which include a 1.4 trillion yuan plan that will be carried out over the next five years and is designed to energize stagnating growth rates in China and make improvements within the country’s dramatically weakened real estate markets. For the quarter ending in September, Alibaba posted somewhat mixed results with adjusted earnings of $2.08 per share and this figure was a slight beat of 1.62% relative to consensus estimates. However, Alibaba’s quarterly revenue figure missed consensus estimate by -1.23% (coming in at $32.7 billion). Despite missing market expectations, Alibaba’s revenue figure actually indicates annualized gains of 5%, while the quarterly EPS figure points to annualized declines of -4% for the period.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/1a90a7c6a5d8a31381a043bc6345d078\" alt=\"Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)\" title=\"Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)\" tg-width=\"1280\" tg-height=\"291\"/><span>Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)</span></p><p>Overall, the quarterly figures that stand out the most in the report can be found in Alibaba’s net income, which came in at $6.07 billion and surpassed consensus expectations by an incredible amount (69.96%). Ultimately, these figures indicate annualized growth rates of 58% and were driven primarily by strength in Alibaba’s equity investments. In discussing these quarterly performances, Alibaba CEO Eddie Wu explained:</p><blockquote><p>This quarter… we entered into long-term collaborations with industry peers to broaden payment and logistics services on Taobao and Tmall platforms, which we expect will accelerate our overall growth. Growth in our Cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth. We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth. Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses.</p></blockquote><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/dc272ce15c61d1cd21706073a67cb499\" alt=\"Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)\" title=\"Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)\" tg-width=\"1280\" tg-height=\"506\"/><span>Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)</span></p><p>One more remarkable aspect of Alibaba’s most recent earnings report can be found in the quarterly performances within the cloud segment, where revenues came in at nearly $4.1 billion and indicated annualized growth rates of 7%. Fortunately, this performance marked a minor increase from the 6% annualized gains posted during the prior quarter, and this shows that Alibaba’s plans to fortify its cloud infrastructure and gain market share in both artificial intelligence and cloud services. In large part, these efforts have been hindered by the Chinese government&#39;s efforts to clamp down on leading technology companies, in moves that reached heights in 2022. In the periods that followed, Alibaba has had to make significant changes in leadership roles in several areas and engage in strategic moves to promote growth through focused competition with Chinese rivals as a way of navigating through rising challenges within the domestic economic framework.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/5ebb57e1f15951b361378f0d38c63c8d\" alt=\"Alibaba: Comparative Forward Price to Earnings Valuations (YCharts)\" title=\"Alibaba: Comparative Forward Price to Earnings Valuations (YCharts)\" tg-width=\"635\" tg-height=\"507\"/><span>Alibaba: Comparative Forward Price to Earnings Valuations (YCharts)</span></p><p>Generalized weaknesses in the Chinese economy with respect to e-commerce and consumer spending on China’s mainland have created situations where several retailers in the region have recently reported lackluster quarterly earnings results. One other example is JD.com, Inc. (JD) and recent declines in share prices have sent shares of the stock to a lower forward price-earnings ratio of 8.737x. Of course, this is firmly below Alibaba’s current forward price-earnings ratio (which now stands at 10.54x). Clearly, these weaker valuations have become a trend within the industry because roughly similar metrics can be seen in PDD Holdings, Inc. (PDD), which is currently trading with a forward price-earnings multiple of 9.781x. Interestingly, we can compare this to a U.S. e-commerce retailer like Amazon.com, Inc. (AMZN), which trades with a much higher forward price-earnings ratio of 39.55x. But it should also be noted that there are still similar North American companies within the same competing industry peer that are trading at much lower valuations. Two of my favorite options with lower current valuations would be <a href=\"https://laohu8.com/S/EBAY\">eBay</a> Inc. (EBAY) at 12.7x and <a href=\"https://laohu8.com/S/ETSY\">Etsy, Inc.</a> (ETSY) at 11.08x.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/33ddb59748bfc56671e4b61296e56685\" alt=\"Alibaba: Comparative Forward Price to Sales Valuations (YCharts)\" title=\"Alibaba: Comparative Forward Price to Sales Valuations (YCharts)\" tg-width=\"635\" tg-height=\"507\"/><span>Alibaba: Comparative Forward Price to Sales Valuations (YCharts)</span></p><p>If we change the valuation metric and use the forward price-sales ratio, Alibaba starts to look more favorable within this industry peer grouping (at 1.507x) because PinDuoDuo is trading at nearly twice the valuation (at 2.813x). Conversely, JD.com is still much cheaper (at 0.325x) but the North American stocks are significantly more expensive, with Amazon now seen with a forward price-sales ratio of 3.332x. Somewhat similar metrics for eBay can be seen at 2.863x, but Etsy is currently trading at much lower valuations at 1.981x.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e4280be8f748460aae97a76e5d463d66\" alt=\"Alibaba: Comparative Forward Price to Book Valuations (YCharts)\" title=\"Alibaba: Comparative Forward Price to Book Valuations (YCharts)\" tg-width=\"635\" tg-height=\"507\"/><span>Alibaba: Comparative Forward Price to Book Valuations (YCharts)</span></p><p>In Alibaba’s case, price-book ratios arguably offer the most favorable valuation metric because the company is currently trading at just 1.642x book value. In this case, both JD.com (at 1.687x) and PinDuoDuo (which is much higher, at 4.531x) are trading at more expensive valuations at the moment. North American counterparts are currently looking far less attractive using this valuation basis, as Amazon is trading with an elevated price-book ratio of 8.199x, while eBay is seen at 5.432x and Etsy trades massively higher (with a jaw-dropping price-book valuation of 22.11x). On balance, I think this broader valuation metric gives us the best sense of Alibaba’s current position relative to key competitors within the industry, and I think these trends show us that Alibaba remains attractively valued at the moment.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/faf3e8777bd496182683dce1c72ffb47\" alt=\"Alibaba: Major Declines &amp; Key Price Levels (Income Generator via TradingView)\" title=\"Alibaba: Major Declines &amp; Key Price Levels (Income Generator via TradingView)\" tg-width=\"1280\" tg-height=\"568\"/><span>Alibaba: Major Declines &amp; Key Price Levels (Income Generator via TradingView)</span></p><p>In addition to potential overvaluation risks that can be seen when analyzing Alibaba on the comparative basis of its forward price-earnings metrics, recent price moves in shares of BABA show possible warning signals for long trades taken near current levels. Specifically, the stock has recently fallen through the 61.8% Fibonacci retracement of the bullish rally from the June 24th, 2024 lows of $71.80 to the October 7th, 2024 highs of $117.82 (which is located above $89.30). Additionally, the stock’s 200-period exponential moving average on the 4-hour timeframe was also broken during this recent price decline, and this suggests that BABA might still fall further before finding support. To the downside, I will next be watching for a possible test of the 78.6% Fibonacci retracement of the aforementioned price move (which currently rests below $81.60). Fortunately, stochastic indicator readings are currently holding at oversold levels, and this ultimately suggests that share prices are likely to start finding support relatively soon. As a result, I think that further declines might be limited, and I believe that the stock’s attractive relative price-book valuations are supported by the longer-term growth prospects that continue to develop within Alibaba’s recent quarterly earnings reports. For these reasons, I will continue holding my long position and I expect to see the stock rally to new near-term highs before the end of the year.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Alibaba: Major Declines Create Buying Opportunity</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAlibaba: Major Declines Create Buying Opportunity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-20 23:50 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4738529-alibaba-major-declines-create-buying-opportunity-technical-analysis-rating-upgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>I am upgrading Alibaba to a \"strong buy\" due to stable quarterly earnings figures and Chinese government stimulus measures aimed at boosting economic growth.Alibaba's net income surged 58% annually, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4738529-alibaba-major-declines-create-buying-opportunity-technical-analysis-rating-upgrade\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BABA":"阿里巴巴","09988":"阿里巴巴-W"},"source_url":"https://seekingalpha.com/article/4738529-alibaba-major-declines-create-buying-opportunity-technical-analysis-rating-upgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2484942498","content_text":"I am upgrading Alibaba to a \"strong buy\" due to stable quarterly earnings figures and Chinese government stimulus measures aimed at boosting economic growth.Alibaba's net income surged 58% annually, driven by equity investments, while cloud segment revenues grew 7%, showing strength in AI and cloud services.Despite mixed earnings, Alibaba's valuation metrics, particularly price-book ratio, indicate it remains attractively valued compared to industry peers.Recent price declines suggest limited downside, with support likely near $81.60, making BABA a compelling long-term growth investment.Robert WayWhen I last covered Alibaba Group (NYSE:BABA) on October 12th, 2024 with my article “Alibaba: Buy The Pullback”, the stock was in the process of breaking out of a prolonged trading range that had been in place since January 2022. Broadly speaking, my article thesis revolved around the idea that BABA stock was currently undervalued in relation to its industry peer grouping. Since then, the stock has been influenced by significant updates that have fundamentally changed the outlook. As a result, I will be raising my outlook for this stock to a “strong buy” rating, with the expectation that BABA shares can still make sizable moves upward before the end of this year.Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)In addition to posting surprising quarterly earnings figures, the stock has also been impacted by stimulus measures that have been enacted by the Chinese government, which include a 1.4 trillion yuan plan that will be carried out over the next five years and is designed to energize stagnating growth rates in China and make improvements within the country’s dramatically weakened real estate markets. For the quarter ending in September, Alibaba posted somewhat mixed results with adjusted earnings of $2.08 per share and this figure was a slight beat of 1.62% relative to consensus estimates. However, Alibaba’s quarterly revenue figure missed consensus estimate by -1.23% (coming in at $32.7 billion). Despite missing market expectations, Alibaba’s revenue figure actually indicates annualized gains of 5%, while the quarterly EPS figure points to annualized declines of -4% for the period.Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)Overall, the quarterly figures that stand out the most in the report can be found in Alibaba’s net income, which came in at $6.07 billion and surpassed consensus expectations by an incredible amount (69.96%). Ultimately, these figures indicate annualized growth rates of 58% and were driven primarily by strength in Alibaba’s equity investments. In discussing these quarterly performances, Alibaba CEO Eddie Wu explained:This quarter… we entered into long-term collaborations with industry peers to broaden payment and logistics services on Taobao and Tmall platforms, which we expect will accelerate our overall growth. Growth in our Cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth. We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth. Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses.Alibaba: Quarterly Earnings Figures (Alibaba: Quarterly Earnings Presentation)One more remarkable aspect of Alibaba’s most recent earnings report can be found in the quarterly performances within the cloud segment, where revenues came in at nearly $4.1 billion and indicated annualized growth rates of 7%. Fortunately, this performance marked a minor increase from the 6% annualized gains posted during the prior quarter, and this shows that Alibaba’s plans to fortify its cloud infrastructure and gain market share in both artificial intelligence and cloud services. In large part, these efforts have been hindered by the Chinese government's efforts to clamp down on leading technology companies, in moves that reached heights in 2022. In the periods that followed, Alibaba has had to make significant changes in leadership roles in several areas and engage in strategic moves to promote growth through focused competition with Chinese rivals as a way of navigating through rising challenges within the domestic economic framework.Alibaba: Comparative Forward Price to Earnings Valuations (YCharts)Generalized weaknesses in the Chinese economy with respect to e-commerce and consumer spending on China’s mainland have created situations where several retailers in the region have recently reported lackluster quarterly earnings results. One other example is JD.com, Inc. (JD) and recent declines in share prices have sent shares of the stock to a lower forward price-earnings ratio of 8.737x. Of course, this is firmly below Alibaba’s current forward price-earnings ratio (which now stands at 10.54x). Clearly, these weaker valuations have become a trend within the industry because roughly similar metrics can be seen in PDD Holdings, Inc. (PDD), which is currently trading with a forward price-earnings multiple of 9.781x. Interestingly, we can compare this to a U.S. e-commerce retailer like Amazon.com, Inc. (AMZN), which trades with a much higher forward price-earnings ratio of 39.55x. But it should also be noted that there are still similar North American companies within the same competing industry peer that are trading at much lower valuations. Two of my favorite options with lower current valuations would be eBay Inc. (EBAY) at 12.7x and Etsy, Inc. (ETSY) at 11.08x.Alibaba: Comparative Forward Price to Sales Valuations (YCharts)If we change the valuation metric and use the forward price-sales ratio, Alibaba starts to look more favorable within this industry peer grouping (at 1.507x) because PinDuoDuo is trading at nearly twice the valuation (at 2.813x). Conversely, JD.com is still much cheaper (at 0.325x) but the North American stocks are significantly more expensive, with Amazon now seen with a forward price-sales ratio of 3.332x. Somewhat similar metrics for eBay can be seen at 2.863x, but Etsy is currently trading at much lower valuations at 1.981x.Alibaba: Comparative Forward Price to Book Valuations (YCharts)In Alibaba’s case, price-book ratios arguably offer the most favorable valuation metric because the company is currently trading at just 1.642x book value. In this case, both JD.com (at 1.687x) and PinDuoDuo (which is much higher, at 4.531x) are trading at more expensive valuations at the moment. North American counterparts are currently looking far less attractive using this valuation basis, as Amazon is trading with an elevated price-book ratio of 8.199x, while eBay is seen at 5.432x and Etsy trades massively higher (with a jaw-dropping price-book valuation of 22.11x). On balance, I think this broader valuation metric gives us the best sense of Alibaba’s current position relative to key competitors within the industry, and I think these trends show us that Alibaba remains attractively valued at the moment.Alibaba: Major Declines & Key Price Levels (Income Generator via TradingView)In addition to potential overvaluation risks that can be seen when analyzing Alibaba on the comparative basis of its forward price-earnings metrics, recent price moves in shares of BABA show possible warning signals for long trades taken near current levels. Specifically, the stock has recently fallen through the 61.8% Fibonacci retracement of the bullish rally from the June 24th, 2024 lows of $71.80 to the October 7th, 2024 highs of $117.82 (which is located above $89.30). Additionally, the stock’s 200-period exponential moving average on the 4-hour timeframe was also broken during this recent price decline, and this suggests that BABA might still fall further before finding support. To the downside, I will next be watching for a possible test of the 78.6% Fibonacci retracement of the aforementioned price move (which currently rests below $81.60). Fortunately, stochastic indicator readings are currently holding at oversold levels, and this ultimately suggests that share prices are likely to start finding support relatively soon. As a result, I think that further declines might be limited, and I believe that the stock’s attractive relative price-book valuations are supported by the longer-term growth prospects that continue to develop within Alibaba’s recent quarterly earnings reports. For these reasons, I will continue holding my long position and I expect to see the stock rally to new near-term highs before the end of the year.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":10,"commentSize":1,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2484942498"}