Alibaba Stock Falls As Zhang Exits Key Cloud Position, But Is BABA Stock A Buy Now?

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Alibaba Stock Falls As Zhang Exits Key Cloud Position, But Is BABA Stock A Buy Now?

Investor’s Business Daily2023-09-12

Alibaba stock came under selling pressure Monday after outgoing CEO Daniel Zhang unexpectedly stepped down as head of the company' cloud business.Alibaba (BABA) said in June that Zhang was departing ...

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AcidIce
·2023-09-12
It should go lower by 10%++!
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KeeBoonTong
·2023-09-12
Txx g.g7xcgcluy
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In May, Alibaba announced plans to spin off its cloud business as a separate, publicly traded company.Latest EarningsSentiment was positive around Alibaba stock on August 10 as Wall Street weighed the company's latest earnings report.Adjusted profit increased 37% to $2.40 a share, nicely above the consensus estimate of $2.02. Revenue increased 5% to $32.3 billion, above the $30.7 billion consensus. The top-line growth halted four straight quarters of revenue declines.Alibaba stock soared above its 200-day moving average on July 7 after Chinese regulators fined Alibaba's financial arm, Ant Group, just under $1 billion.Ant Group's initial public offering was halted by Chinese regulators in late 2020 for not meeting listing requirements. In April 2021, regulators hit Alibaba with $2.8 billion fine in an anti-monopoly probe. But after three years of regulatory scrutiny, optimism is building that Beijing is close to ending its crackdown on tech firms.Alibaba stock got turned away at its 200-day moving average in mid-May after the Chinese e-commerce giant reported its fourth straight quarter of declining revenue.BABA reported adjusted profit of $1.56 a share, up 24% year over year, with revenue down 6% to $30.3 billion. Alibaba also said its board of directors approved the spinoff of its cloud intelligence business within 12 months. Freshippo, the company's retail chain for groceries and fresh goods also got the go-ahead to pursue an IPO, along with its logistics arm Cainiao Smart Logistics.BABA stock soared 14% on March 28 on reports the company plans to separate into six separate units.The company said each business will have the ability raise outside funding and even pursue an IPO. According to report, the company would likely hold on to its cloud/artificial intelligence business and its giant e-commerce operations.Cloud IntelligenceTaobao Tmall CommerceLocal ServicesCainiao Smart LogisticsGlobal Digital CommerceDigital Media and EntertainmentAlibaba Stock NewsAlibaba stock plunged on April 12 on news Japanese conglomerate Softbank sold most of its stake in Alibaba. At one point, Softbank owned a 25% stake in BABA worth more than $100 billion.A day earlier, Alibaba stock reversed lower on April 11 after the company officially joined the artificial intelligence race with the launch of its own generative AI system.Alibaba said the ChatGPT-style AI system will first be added to DingTalk, Alibaba's workplace-messaging app, as well as Tmall Genie, a smart-speaker system.The news comes after Baidu (BIDU) launched its own AI chatbot in April.A 6% intraday gain for Alibaba stock on Feb. 23 faded to a loss of 0.65% despite better-than-expected fiscal Q3 results. Adjusted profit rose 5% to $2.79 a share, well above the $2.37 consensus. Revenue fell 6% to $35.9 billion, slightly ahead of the $35.76 billion consensus.\"We delivered a solid quarter despite softer demand, supply chain and logistics disruptions due to impact of changes in COVID-19 measures,\" said CEO Daniel Zhang. \"Looking ahead, we expect continued recovery in consumer sentiment and economic activity.\"Alibaba stock jumped 3% on Feb. 9 on news that the Alibaba Dharma Academy — a science- and technology-focused research institute — is working on ChatGPT-like dialogue robot. But Alibaba stock gave back early gains, weighed down by weakness in the broad market.But regulatory fears for Chinese stocks like Alibaba have been abating. A top Chinese regulator recently said the country is close to wrapping up investigations into internet platform operators like Alibaba.Singles DayAlibaba, along with JD.com (JD), didn't release specific gross merchandise volume for its Nov. 11 Singles Day, the world's biggest annual shopping event. Alibaba did say that volume was comparable to last year, when the company reported gross merchandise volume of $84.5 billion, up more than 8% from the year-ago period. But that was a sharp slowdown from 26% growth in 2020.Sentiment was weak around Chinese stocks in October after the Biden administration announced new restrictions on China's access to U.S. semiconductor technology, including restrictions on the exports of some types of chips used in supercomputing and artificial intelligence. It also imposed tighter rules on the sale of chip equipment to China.Alibaba stock rallied sharply in late August last year on reports that Beijing and U.S. regulators were close to an audit-inspection deal.In late July 2022, the U.S. Securities and Exchange Commission added Alibaba to a list of Chinese firms at risk of being delisted for not opening their books to U.S. accounting regulators.Alibaba stock jumped on June 17 but pared early gains after Reuters reported that China's central bank accepted Ant Group's application to set up a financial holding company.In early November 2020, Chinese authorities suspended the $34.5 billion Ant Group IPO in Shanghai and Hong Kong. Ant Group is the fintech arm of Alibaba. The decision to suspend the IPO came after Shanghai exchange officials said the exchange would halt the listing due to the company's inability to fulfill conditions amid changes in the regulatory environment.Recent EarningsAs part of its Nov. 17 earnings report, which showed adjusted profit up 5% year over year to $1.82 a share but revenue down 6% to $29.1 billion, BABA said it's increasing its share buyback program by $15 billion. That's on top of an existing $25 billion program. As of Nov. 16, the company said it already repurchased $18 billion worth of stock under its existing program.In early August, Alibaba reported fiscal first-quarter revenue of $30.7 billion, down nearly 4% from the year-ago quarter but slightly above the consensus of around $30 billion. Adjusted profit of $1.75 a share was also above the $1.58 consensus.Alibaba's China commerce segment fell 1% to $21.19 billion. The company's cloud segment did revenue of $1.59 billion, up 10% year over year.Sellers Hit BABA StockIncreased regulatory scrutiny has weighed on Alibaba and other Chinese stocks for the past couple of years. Besides a strict regulatory environment, Chinese stocks have also been dealing with a slowing economy.In April 2020, China regulators fined Alibaba $2.8 billion after an antimonopoly probe. At the time, it looked like BABA stock was ready to break out of a downtrend. But the stock got turned away at its 50-day moving average. It tried to rally above the 50-day line again in late April but sellers knocked the stock lower again.BABA stock crashed another 8% on Nov. 10 after Chinese regulators announced new draft antimonopoly rules for China online platforms like Alibaba and JD.com, among others.Alibaba Stock Fundamental AnalysisIn recent years, it's hard to find a company with a more impressive track record of growth than Alibaba. The company has a five-year annualized earnings growth rate of 11%, although fundamentals have weakened considerably in recent quarters.Alibaba's Composite Rating of 79 (on a scale of 1-99 with 99 being the best) has improved quite a bit, helped in part by improving relative price strength.Annual return on equity of 14% helps give Alibaba a respectable SMR Rating (sales + margins + return on equity) of B from IBD Stock Checkup (on an A-to-E scale with A tops).The Stock Checkup tool quickly identifies group leaders based on a combination of fundamental and technical factors.According to Zacks, Alibaba is expected to earn $8.99 a share in its current fiscal year 2024, up 13% compared to fiscal 2023, with growth slowing a bit in fiscal 2025, up 6% to $9.52.Alibaba Stock Technical AnalysisAlibaba's relative strength line has started to trend lower after a period of underperformance.A stock's relative strength line, found in daily and weekly charts at Investors.com, compares the stock's daily price performance to the S&P 500. An upward-sloping RS line means the stock is outperforming the S&P 500. A downward-sloping line means the stock is lagging the S&P 500.Alibaba's Accumulation/Distribution Rating is a marginal B-, weighed down by some higher-volume declines in recent days.BABA Stock: Is It A Buy Now?Overhead supply issues are still a concern for Alibaba stock with the stock more than 25% off its high.A decisive move above the 50-day line on Nov. 15 was enough to break BABA stock out of its downtrend and give a buy signal. But the stock started to look extended after soaring 19% during the week ended Dec. 2.Alibaba stock broke out again during the week ended Jan. 6, the same day the Nasdaq composite and S&P 500 marked follow-through days. It rallied more than 16% from before pulling back.Alibaba's fell sharply below its 50-day moving average on April 12, marring its cup-with-handle base. It was a flawed pattern because the handle that started forming on March 31 was slightly in the bottom half of the base.Alibaba stock is below all of its key moving averages as it struggles to attract buyers. Because BABA stock is still on a downtrend, it's not a buy now. If BABA can move above its Sept. 1 high with conviction. that would be enough to break Alibaba stock out of its latest downtrend and give a buy signal.","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":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":219029506494464,"gmtCreate":1694499704368,"gmtModify":1694499708400,"author":{"id":"3569382039983887","authorId":"3569382039983887","name":"AcidIce","avatar":"https://static.tigerbbs.com/25a5edd325094826cf6e8822874786ab","vip":1,"crmLevel":5,"crmLevelSwitch":1,"authorIdStr":"3569382039983887","idStr":"3569382039983887"},"htmlText":"It should go lower by 10%++!","listText":"It should go lower by 10%++!","text":"It should go lower by 10%++!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/219029506494464","repostId":1196339617,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":219011897802944,"gmtCreate":1694495423167,"gmtModify":1694495427570,"author":{"id":"3578717603960999","authorId":"3578717603960999","name":"KeeBoonTong","avatar":"https://static.tigerbbs.com/815864515bc02d554ba00b04f5f46a1a","vip":1,"hat":"https://static.tigerbbs.com/6444b4970948c1077534c593eccd6d16","crmLevel":4,"crmLevelSwitch":1,"authorIdStr":"3578717603960999","idStr":"3578717603960999"},"htmlText":"Txx g.g7xcgcluy","listText":"Txx g.g7xcgcluy","text":"Txx g.g7xcgcluy","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/219011897802944","repostId":1196339617,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":18,"commentSize":2,"repostSize":2,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}