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- 低调的投资者低调的投资者
  ·2021-06-05
  No matter how good is the fundamental, we still need to take note of the anti monopoly drive in China.
  Can Alibaba Stock Hit $500? If You Got Time, Yes
  Alibaba is a battleground stock where some see a lot of opportunities, while others see many risks.I believe that there are both opportunities and risks, but would see the prior outweighing the latter.In the long run, BABA has a chance of delivering strong gains for those that buy at the current, quite low, valuation.Since its IPO, Alibaba has seen strong share price gains, but it should also be mentioned that shares did peek in H2 2020, and have declined considerably since then:. Alibaba Group'
  Can Alibaba Stock Hit $500? If You Got Time, Yes
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- 低调的投资者低调的投资者
  ·2021-06-03
  Very good analysis
  Alibaba: One Of The Really Cheap Bargains In This Market
  Alibaba is one of the largest corporations in the world and focusing on retail, cloud and payment services.The company is clearly facing risks due to the tension between Jack Ma and the Chinese government, but I consider these risks to be only temporary.Alibaba is growing with a high pace, has a very stable balance sheet and outperforming many of its peers.So far, I have published over 300 articles on this site and the focus has been clearly on companies having the headquarters in the United Sta
  Alibaba: One Of The Really Cheap Bargains In This Market
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- 低调的投资者低调的投资者
  ·2021-04-29
  Which one is better choice?
  Like Discounts? These Game-Changing Stocks Are 40% (or More) Below Their 52-Week Highs
  History says that if you buy high-quality businesses and hang onto them for long periods of time, yo
  Like Discounts? These Game-Changing Stocks Are 40% (or More) Below Their 52-Week Highs
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matter how good is the fundamental, we still need to take note of the anti monopoly drive in China.","listText":"No matter how good is the fundamental, we still need to take note of the anti monopoly drive in China.","text":"No matter how good is the fundamental, we still need to take note of the anti monopoly drive in China.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/112044017","repostId":"1154529120","repostType":4,"repost":{"id":"1154529120","kind":"news","pubTimestamp":1622810459,"share":"https://ttm.financial/m/news/1154529120?lang=&edition=fundamental","pubTime":"2021-06-04 20:40","market":"us","language":"en","title":"Can Alibaba Stock Hit $500? If You Got Time, Yes","url":"https://stock-news.laohu8.com/highlight/detail?id=1154529120","media":"seekingalpha","summary":"Alibaba is a battleground stock where some see a lot of opportunities, while others see many risks.I believe that there are both opportunities and risks, but would see the prior outweighing the latter.In the long run, BABA has a chance of delivering strong gains for those that buy at the current, quite low, valuation.Since its IPO, Alibaba has seen strong share price gains, but it should also be mentioned that shares did peek in H2 2020, and have declined considerably since then:. Alibaba Group'","content":"<p><b>Summary</b></p>\n<ul>\n <li>Alibaba is a battleground stock where some see a lot of opportunities, while others see many risks.</li>\n <li>I believe that there are both opportunities and risks, but would see the prior outweighing the latter.</li>\n <li>In the long run, BABA has a chance of delivering strong gains for those that buy at the current, quite low, valuation.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/567d19950e6c8789ce2192b4503f0fa5\" tg-width=\"1536\" tg-height=\"653\" referrerpolicy=\"no-referrer\"><span>Photo by efetova/iStock via Getty Images</span></p>\n<p><b>Article Thesis</b></p>\n<p>Alibaba Group (BABA) is a leading global high-tech name that continues to generate attractive growth and that offers investors exposure to the high-growth Chinese consumer market. At the same time, through a range of ventures, Alibaba is also active in additional industries, such as cloud computing. Shares have declined considerably over the last couple of months, but I believe that the long-term potential is significant. I would not be surprised to see shares rise towards $500, although that will not happen in the near term.</p>\n<p><b>BABA Stock Price</b></p>\n<p>Since its IPO, Alibaba has seen strong share price gains, but it should also be mentioned that shares did peek in H2 2020, and have declined considerably since then:</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8079eeb5384ea003fb3725d3cd1e877f\" tg-width=\"635\" tg-height=\"403\"><span>Data byYCharts</span></p>\n<p>Shares are now basically where they were one year ago, as the gains during summer 2020 have been erased when Ant Financial's IPO plans were stopped. The flat share price performance over the last year is somewhat surprising, though, as Alibaba continued to generate strong results in that time frame. During the last quarter, for example, Alibaba showcased a&nbsp;revenue growth rate of 64%, while revenue growth during the previous quarter was also very strong, at around 50%. This is not the only positive in Alibaba's earnings releases, however. The company also managed to grow its user count by 32 million during the most recent quarter alone, which equates to an annualized user growth rate of around 20%. This bodes well for future quarters, as more users on Alibaba's platform should translate into higher revenues. On top of that, the strong user growth shows that there is still growing demand for the shopping services that Alibaba's platforms offer -- the market is not saturated at all. Alibaba also managed to grow its EBITDA by 25% year over year, which is an attractive growth pace as well, and which was achieved despite growing investments in what management calls key growth areas. Income from operations, meanwhile, grew at an even faster pace, thanks to some operating leverage, rising by 48% year over year when adjusted for the fine that Alibaba had to pay during Q1. It makes, I believe, sense to back out this one-time item to get a clearer picture about Alibaba's underlying, \"core\" profitability during an average quarter.</p>\n<p>Alibaba Group's weak share price performance, relative to the broad market and other tech names, is thus not the result of weak operating performance, but rather a result of multiple compression, driven by weak investor sentiment due to China exposure and&nbsp;fears about regulation.</p>\n<p>At its current price of $220, BABA trades at a quite large discount compared to the current consensus analyst price target of $298. If Alibaba were to hit that, shares would gain 35%. Analyst price targets are usually issued with a 1-year time frame, thus, if the analyst community is correct, Alibaba could be a great investment. From a valuation standpoint, this price target doesn't seem outrageous at all, as $298 would equate to around 29x this year's expected net profits, or 23x next year's net earnings. The latter is likely the more telling one when we talk about a price target for summer 2022, i.e. 1 year from now.</p>\n<p><b>Can Alibaba Stock Hit $500?</b></p>\n<p>The answer to that question, I think, depends on your time frame. If you are looking at a 12-month window, then Alibaba will most likely not be able to hit $500. The ~$300 price target seems achievable, although that is, of course, also not guaranteed. If, however, we take a longer-term view, then $500 seems like a share price that BABA could hit eventually. Let's look at a couple of examples.</p>\n<p><i>- If Alibaba were to generate earnings per share of $20 at some point and traded at an earnings multiple of 25, then shares would trade at $500.</i></p>\n<p><i>- If Alibaba were to generate earnings per share of $25 and traded at a 20x earnings multiple, then shares would trade at $500.</i></p>\n<p><i>- If Alibaba were to generate earnings per share of $17 and traded at 29x its net profits, then shares would trade at (marginally below) $500.</i></p>\n<p>We see that there are many scenarios that could get us to a $500 share price for BABA, some of them more likely than others. Of course, the higher your target multiple, the lower the earnings that would be required. This, in turn, means that the price target can be hit sooner, as less cumulative earnings growth would be required. When we take a look at how Alibaba was valued in the past, we see that the longer-term median earnings multiples for BABA look like this:</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/dd2d42b7094deb394266d6410287c2e4\" tg-width=\"635\" tg-height=\"436\"><span>Data byYCharts</span></p>\n<p>At 30-40x net earnings, Alibaba was clearly trading at a massive premium relative to how shares are valued today (around 20x this year's earnings). I think that the current valuation is too low, but on the other hand, I do not expect Alibaba to trade at 30, 35, or even 40x net profits in coming years. Due to the growing scale of Alibaba, which makes it a little harder to maintain its excellent growth in coming years, shares will likely trade at a lower valuation in coming years, compared to how they were valued in the past.</p>\n<p>I still think that shares do have some valuation expansion potential from the current earnings multiple of around 21, thus let's assume that shares trade at 23x net profits in the future. This would still represent a massive discount versus the historic valuation, and also a substantial discount compared to how US-based high-tech mega-caps are valued -- Amazon (AMZN), for example, trades at 59x this year's earnings.</p>\n<p>If we want to get to a $500 share price for BABA using a 23x earnings multiple, then we get to earnings per share of $21.70 that Alibaba must generate. When could this be the case? In the following chart, we see EPS estimates for the current year, next year (CY 2022), and CY 2023:</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/6fcf78e0b071eff9753afbdcd96f751c\" tg-width=\"635\" tg-height=\"436\"><span>Data byYCharts</span></p>\n<p>If analysts are right, Alibaba will not get to earn $22 a share through 2023, and I think that is realistic. I do not see earnings per share rising by 100%+ between this year and 2023, either. From 2023, it would take another 43% increase in Alibaba's earnings per share to get to $21.70, which is our \"target EPS\" for a $500 share price.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7b4c351b4b5eb3328191ccaa9a3b776c\" tg-width=\"635\" tg-height=\"403\"><span>Data byYCharts</span></p>\n<p>Analysts are currently forecasting long-term EPS growth of around 27%, which would mean it would take Alibaba about 1.5 years to grow its EPS from $15.20 (2023 estimate) to our target of $21.70. Even if we assume that this is too optimistic and that growth will be just 20% in 2024 and 2025, EPS of $21.70 could be hit by the end of 2025. So, in other words, if Alibaba grows a little less than what analysts are forecasting right now, Alibaba could trade at $500 by the end of 2025 -- or 4.5 years from now. Note that this scenario does not require a high earnings multiple at all -- at 23x net profits, Alibaba wouldn't be expensive, I believe.</p>\n<p>We can get even more conservative and assume that the 2023 EPS estimate is 10% too high and that EPS will grow by just 17% a year in the years beyond 2023 (versus a long-term forecast of 27% a year by the analyst community). In that case, Alibaba would hit $21.70 in earnings per share in 2026, and shares would rise to $500 over the next 5.5 years. Even in this scenario, BABA wouldn't be a bad investment at all -- a 130% share price increase from the current level over the next 5.5 years would equate to annualized returns of 16%.</p>\n<p>So, to sum this section up, I'd say<i>yes, BABA can hit $500</i>-- but it will realistically take a couple of years. By the mid-2020s, this seems like a very achievable goal to me, although there are, of course, no guarantees.</p>\n<p><b>Is Alibaba Stock A Buy Or Sell Now?</b></p>\n<p>Alibaba Group is, I believe, a strong investment. The company generates strong growth, profits from multiple long-term macro trends, such as growing consumer spending in China, growing e-commerce market share, and cloud computing. There are, however, risks to consider: Alibaba is highly China-dependent, and in case the economic growth story in China ends, Alibaba would be hurt a lot. On top of that, Alibaba could be targeted again by regulators, although I personally think that it is not in China's best interest to hurt one of its highest-growth tech companies.</p>\n<p>For those that worry about these risks, Alibaba may not be the right choice, but for those that see Alibaba as a potentially very rewarding play on Chinese consumers, BABA could be a strong pick in a diversified portfolio. I belong to the latter group and thus rate the stock a buy at current valuations, expecting significant upside over the coming years. Depending on your risk tolerance and how you weigh the opportunities and threats of investing in Chinese companies, you may decide differently, however.</p>","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>Can Alibaba Stock Hit $500? If You Got Time, Yes</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; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\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\">\nCan Alibaba Stock Hit $500? If You Got Time, Yes\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-04 20:40 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4432992-alibaba-stock-hit-500><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nAlibaba is a battleground stock where some see a lot of opportunities, while others see many risks.\nI believe that there are both opportunities and risks, but would see the prior outweighing ...</p>\n\n<a href=\"https://seekingalpha.com/article/4432992-alibaba-stock-hit-500\">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/4432992-alibaba-stock-hit-500","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1154529120","content_text":"Summary\n\nAlibaba is a battleground stock where some see a lot of opportunities, while others see many risks.\nI believe that there are both opportunities and risks, but would see the prior outweighing the latter.\nIn the long run, BABA has a chance of delivering strong gains for those that buy at the current, quite low, valuation.\n\nPhoto by efetova/iStock via Getty Images\nArticle Thesis\nAlibaba Group (BABA) is a leading global high-tech name that continues to generate attractive growth and that offers investors exposure to the high-growth Chinese consumer market. At the same time, through a range of ventures, Alibaba is also active in additional industries, such as cloud computing. Shares have declined considerably over the last couple of months, but I believe that the long-term potential is significant. I would not be surprised to see shares rise towards $500, although that will not happen in the near term.\nBABA Stock Price\nSince its IPO, Alibaba has seen strong share price gains, but it should also be mentioned that shares did peek in H2 2020, and have declined considerably since then:\nData byYCharts\nShares are now basically where they were one year ago, as the gains during summer 2020 have been erased when Ant Financial's IPO plans were stopped. The flat share price performance over the last year is somewhat surprising, though, as Alibaba continued to generate strong results in that time frame. During the last quarter, for example, Alibaba showcased a revenue growth rate of 64%, while revenue growth during the previous quarter was also very strong, at around 50%. This is not the only positive in Alibaba's earnings releases, however. The company also managed to grow its user count by 32 million during the most recent quarter alone, which equates to an annualized user growth rate of around 20%. This bodes well for future quarters, as more users on Alibaba's platform should translate into higher revenues. On top of that, the strong user growth shows that there is still growing demand for the shopping services that Alibaba's platforms offer -- the market is not saturated at all. Alibaba also managed to grow its EBITDA by 25% year over year, which is an attractive growth pace as well, and which was achieved despite growing investments in what management calls key growth areas. Income from operations, meanwhile, grew at an even faster pace, thanks to some operating leverage, rising by 48% year over year when adjusted for the fine that Alibaba had to pay during Q1. It makes, I believe, sense to back out this one-time item to get a clearer picture about Alibaba's underlying, \"core\" profitability during an average quarter.\nAlibaba Group's weak share price performance, relative to the broad market and other tech names, is thus not the result of weak operating performance, but rather a result of multiple compression, driven by weak investor sentiment due to China exposure and fears about regulation.\nAt its current price of $220, BABA trades at a quite large discount compared to the current consensus analyst price target of $298. If Alibaba were to hit that, shares would gain 35%. Analyst price targets are usually issued with a 1-year time frame, thus, if the analyst community is correct, Alibaba could be a great investment. From a valuation standpoint, this price target doesn't seem outrageous at all, as $298 would equate to around 29x this year's expected net profits, or 23x next year's net earnings. The latter is likely the more telling one when we talk about a price target for summer 2022, i.e. 1 year from now.\nCan Alibaba Stock Hit $500?\nThe answer to that question, I think, depends on your time frame. If you are looking at a 12-month window, then Alibaba will most likely not be able to hit $500. The ~$300 price target seems achievable, although that is, of course, also not guaranteed. If, however, we take a longer-term view, then $500 seems like a share price that BABA could hit eventually. Let's look at a couple of examples.\n- If Alibaba were to generate earnings per share of $20 at some point and traded at an earnings multiple of 25, then shares would trade at $500.\n- If Alibaba were to generate earnings per share of $25 and traded at a 20x earnings multiple, then shares would trade at $500.\n- If Alibaba were to generate earnings per share of $17 and traded at 29x its net profits, then shares would trade at (marginally below) $500.\nWe see that there are many scenarios that could get us to a $500 share price for BABA, some of them more likely than others. Of course, the higher your target multiple, the lower the earnings that would be required. This, in turn, means that the price target can be hit sooner, as less cumulative earnings growth would be required. When we take a look at how Alibaba was valued in the past, we see that the longer-term median earnings multiples for BABA look like this:\nData byYCharts\nAt 30-40x net earnings, Alibaba was clearly trading at a massive premium relative to how shares are valued today (around 20x this year's earnings). I think that the current valuation is too low, but on the other hand, I do not expect Alibaba to trade at 30, 35, or even 40x net profits in coming years. Due to the growing scale of Alibaba, which makes it a little harder to maintain its excellent growth in coming years, shares will likely trade at a lower valuation in coming years, compared to how they were valued in the past.\nI still think that shares do have some valuation expansion potential from the current earnings multiple of around 21, thus let's assume that shares trade at 23x net profits in the future. This would still represent a massive discount versus the historic valuation, and also a substantial discount compared to how US-based high-tech mega-caps are valued -- Amazon (AMZN), for example, trades at 59x this year's earnings.\nIf we want to get to a $500 share price for BABA using a 23x earnings multiple, then we get to earnings per share of $21.70 that Alibaba must generate. When could this be the case? In the following chart, we see EPS estimates for the current year, next year (CY 2022), and CY 2023:\nData byYCharts\nIf analysts are right, Alibaba will not get to earn $22 a share through 2023, and I think that is realistic. I do not see earnings per share rising by 100%+ between this year and 2023, either. From 2023, it would take another 43% increase in Alibaba's earnings per share to get to $21.70, which is our \"target EPS\" for a $500 share price.\nData byYCharts\nAnalysts are currently forecasting long-term EPS growth of around 27%, which would mean it would take Alibaba about 1.5 years to grow its EPS from $15.20 (2023 estimate) to our target of $21.70. Even if we assume that this is too optimistic and that growth will be just 20% in 2024 and 2025, EPS of $21.70 could be hit by the end of 2025. So, in other words, if Alibaba grows a little less than what analysts are forecasting right now, Alibaba could trade at $500 by the end of 2025 -- or 4.5 years from now. Note that this scenario does not require a high earnings multiple at all -- at 23x net profits, Alibaba wouldn't be expensive, I believe.\nWe can get even more conservative and assume that the 2023 EPS estimate is 10% too high and that EPS will grow by just 17% a year in the years beyond 2023 (versus a long-term forecast of 27% a year by the analyst community). In that case, Alibaba would hit $21.70 in earnings per share in 2026, and shares would rise to $500 over the next 5.5 years. Even in this scenario, BABA wouldn't be a bad investment at all -- a 130% share price increase from the current level over the next 5.5 years would equate to annualized returns of 16%.\nSo, to sum this section up, I'd sayyes, BABA can hit $500-- but it will realistically take a couple of years. By the mid-2020s, this seems like a very achievable goal to me, although there are, of course, no guarantees.\nIs Alibaba Stock A Buy Or Sell Now?\nAlibaba Group is, I believe, a strong investment. The company generates strong growth, profits from multiple long-term macro trends, such as growing consumer spending in China, growing e-commerce market share, and cloud computing. There are, however, risks to consider: Alibaba is highly China-dependent, and in case the economic growth story in China ends, Alibaba would be hurt a lot. On top of that, Alibaba could be targeted again by regulators, although I personally think that it is not in China's best interest to hurt one of its highest-growth tech companies.\nFor those that worry about these risks, Alibaba may not be the right choice, but for those that see Alibaba as a potentially very rewarding play on Chinese consumers, BABA could be a strong pick in a diversified portfolio. I belong to the latter group and thus rate the stock a buy at current valuations, expecting significant upside over the coming years. Depending on your risk tolerance and how you weigh the opportunities and threats of investing in Chinese companies, you may decide differently, however.","news_type":1},"isVote":1,"tweetType":1,"viewCount":165,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":111571373,"gmtCreate":1622689229192,"gmtModify":1704188994829,"author":{"id":"3581239622700429","authorId":"3581239622700429","name":"低调的投资者","avatar":"https://static.tigerbbs.com/cf89402cee9fd8f39781c1abc4d5f1a7","crmLevel":4,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3581239622700429","authorIdStr":"3581239622700429"},"themes":[],"htmlText":"Very good analysis","listText":"Very good analysis","text":"Very good analysis","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/111571373","repostId":"1138216687","repostType":2,"repost":{"id":"1138216687","kind":"news","pubTimestamp":1622552095,"share":"https://ttm.financial/m/news/1138216687?lang=&edition=fundamental","pubTime":"2021-06-01 20:54","market":"hk","language":"en","title":"Alibaba: One Of The Really Cheap Bargains In This Market","url":"https://stock-news.laohu8.com/highlight/detail?id=1138216687","media":"seekingalpha","summary":"Alibaba is one of the largest corporations in the world and focusing on retail, cloud and payment services.The company is clearly facing risks due to the tension between Jack Ma and the Chinese government, but I consider these risks to be only temporary.Alibaba is growing with a high pace, has a very stable balance sheet and outperforming many of its peers.So far, I have published over 300 articles on this site and the focus has been clearly on companies having the headquarters in the United Sta","content":"<p><b>Summary</b></p>\n<ul>\n <li>Alibaba is one of the largest corporations in the world and focusing on retail, cloud and payment services.</li>\n <li>The company is clearly facing risks due to the tension between Jack Ma and the Chinese government, but I consider these risks to be only temporary.</li>\n <li>Alibaba is growing with a high pace, has a very stable balance sheet and outperforming many of its peers.</li>\n <li>In my opinion, the stock is severely undervalued.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/15ac5f97c66688f6d16ce98819ebce4a\" tg-width=\"768\" tg-height=\"512\"><span>Photo by maybefalse/iStock Unreleased via Getty Images</span></p>\n<p>So far, I have published over 300 articles on this site and the focus has been clearly on companies having the headquarters in the United States and stocks listed on an US-based stock exchange. And while I am covering also companies from Germany, France, Great Britain, Sweden or Denmark, I have avoided one country almost completely although it has many interesting investment opportunities: Mainland China.The only company I covered so far&nbsp;is Tencent Holdings Limited (OTCPK:TCEHY).</p>\n<p>And although China has hundreds or thousands of successful companies, most of them are almost unknown in the Western Hemisphere (especially when moving outside of the investing world). And while most investors are familiar with Tencent, there is at least one other company almost every investor has heard of: Alibaba Group Holding Limited (BABA). In the following article, I will analyze Alibaba in my usual way. I will try to determine if Alibaba is a solid business with a wide economic moat and try to answer the question if Alibaba is a solid investment right now.</p>\n<p><b>Business Description</b></p>\n<p>Alibaba Group was founded in 1999 by 18 individuals. Nevertheless, one of these 18 stands out – the former English teacher from Hangzhou, Jack Ma. Over the years, Alibaba evolved in a multinational technology company and with a market capitalization of $570 billion, Alibaba is on the 10thspot on the list of most valuable companies in the world (by market cap). And behind Tencent, which is on the 7thspot on that list, Alibaba is the second most valuable company in China.</p>\n<p>While Alibaba is mostly focused on e-commerce and retail operations, the Alibaba Group is actually a holding company with many different sales services. This includes C2C services, B2C services and B2B services. Aside from retail, the Alibaba Group also offers electronic payment services, shipping search engines and could computing services. The group owns and operates a diverse portfolio of companies around the world in numerous business sectors.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b315044f4644568e7df5d95cc6720995\" tg-width=\"640\" tg-height=\"479\"><span>(Source:Alibaba Q4/20 Presentation)</span></p>\n<p>Alibaba is reporting in four different segments:</p>\n<ul>\n <li><b>Core Commerce Revenue</b>: This segment is comprised of platforms operating in retail and wholesale commerce in China as well as logistics services and local consumer services. In fiscal 2021, this segment generated RMB 621.1 billion in revenue and RMB 159 billion in income from operations.</li>\n <li><b>Cloud Computing Revenue</b>: This segment is comprised of Alibaba Cloud, which offers different cloud services to customers worldwide like database, storage, big data analytics, a machine learning platform and large-scale computing security. In fiscal 2021, this segment generated RMB 60.1 billion, but the segment was not profitable so far (a loss of RMB 9 billion).</li>\n <li><b>Digital Media and Entertainment Revenue</b>: This segment uses the deep data insights to serve the broader interests of consumers through key distribution platforms Youku and Alibaba Pictures as well as other content platforms that provide online videos, films, live events, literature and music. In fiscal 2021, this segment generated RMB 31.2 billion, but was also not profitable.</li>\n <li><b>Innovation Initiatives and Others Revenue</b>: This segment includes businesses like Amap, DingTalk, Tmall Genie and others. In fiscal 2021, this segment generated RMB 4.8 billion in revenue, but also an operating loss.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0529c547e87a4c0b023289ecb1822cbc\" tg-width=\"640\" tg-height=\"478\"><span>(Source: Alibaba Q4/20 Presentation)</span></p>\n<p>When looking at the last annual results (fiscal 2021), Alibaba generated RMB 717.3 billion in revenue. Compared to fiscal 2020 (RMB 509.7 billion) this is reflecting an increase of 41%. Adjusted EBITDA in fiscal 2021 was RMB 196.8 billion – an increase of 25% compared to fiscal 2020 (adjusted EBITA of RMB 157.7 billion). Diluted earnings per share actually decreased from RMB 6.99 in fiscal 2020 to RMB 6.84 in fiscal 2021 – reflecting a decrease of 2.1%. But we should not pay too much attention to the earnings per share. Instead, it makes much more sense to look at the free cash flow Alibaba is generating. In fiscal 2021, Alibaba generated RMB 172.7 billion in free cash flow compared to RMB 130.9 billion in free cash flow one year earlier.</p>\n<p><b>Strong Business Among Strong Competitors</b></p>\n<p>What is striking when looking at Alibaba – and what has been discussed several times – is the low multiple for which Alibaba is currently trading. When using the trailing twelve-month GAAP numbers, Alibaba is trading for 25 times earnings, when using the non-GAAP forward numbers, it is trading for a P/E ratio of 20.</p>\n<p>We can compare Alibaba to its peers – companies like Amazon (AMZN), Tencent, Facebook (FB), Microsoft (MSFT) or Alphabet (GOOG). And Alibaba actually belongs in that list as it is not only operating in similar business segments, but it is also growing with similarly high rates. And Alibaba is not only growing with a similar pace; it is actually outperforming most of its peers.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b576dcef2e37a02a6eba5677fded8ef8\" tg-width=\"640\" tg-height=\"299\"><span>(Source:Alibaba 2020 Investor Presentations)</span></p>\n<p>While Alibaba is growing with a similar pace like these companies, it is trading for a completely different multiple. Right now, Alibaba is trading for a price-cash-flow ratio of 17, while competitors like Tencent, Facebook or Microsoft are trading for a P/FCF ratio between 35 and 40. It is striking, that the market is assigning these competitors a multiple twice as high and Amazon is actually trading for a multiple more than 4 times higher (price-free-cash-flow ratio of 76).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/6d2f58771a8062c7bb980622b93073e5\" tg-width=\"635\" tg-height=\"470\"><span>Data by YCharts</span></p>\n<p>Right now, readers might point out, that the comparison to Amazon is misleading as Amazon is still spending a lot of money to achieve future growth and therefore has a lower profit than other companies. And it certainly is true, that Amazon is still focusing on top line growth – sometimes at the expense of bottom-line growth – but so does Alibaba.</p>\n<p>While Amazon spent 10.4% of its revenue as capital expenditures in the last fiscal year, Alibaba spent almost the same amount – 8.9% of revenue. And when looking at the expenses for research and development, we once again see similar numbers. In the last five years, Amazon spent 12.16% of revenue on R&amp;D on average while Alibaba spent 10.38% of its revenue on R&amp;D.</p>\n<p>But while these numbers are quite similar for both companies – Amazon is spending a bit more on R&amp;D than Alibaba – the free cash flow these two companies can generate is completely different. While Amazon only generated 6.7% of revenue as free cash flow in the last fiscal year, Alibaba generated 26.5% of revenue as free cash flow in the last fiscal year – almost four times higher.</p>\n<p>And Alibaba is not only extremely profitable – it was growing with an extremely high pace in the past. During the past ten years, Alibaba could not only grow revenue every single year, it also grew revenue with a CAGR of 62.6%. Earnings per share fluctuated a little bit during these ten years but grew with an even higher pace – a CAGR of 76.29% during the last decade. And finally, free cash flow increased with a CAGR of 59.62% during the last decade.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d3ccaf170c0d86cd8022a68bc3657c30\" tg-width=\"640\" tg-height=\"404\"><span>(Source: Author’s work based on numbers from Morningstar)</span></p>\n<p>When looking at Alibaba’s growth rates in the last few years compared to its competitors, Alibaba is also outperforming. When looking at the revenue CAGR of the last 5 years, we get the following numbers:</p>\n<ul>\n <li>Amazon: 29.26%</li>\n <li>Facebook: 36.82%</li>\n <li>Tencent: 36.20%</li>\n <li>Alphabet: 19.47%</li>\n <li>Microsoft: 8.85%</li>\n <li>Alibaba: 46.24%</li>\n</ul>\n<p>We can spin it how we want: Alibaba is an extremely profitable company growing with extremely high rates but is trading at an extremely low multiple compared to its competitors. It is growing with a higher pace than Microsoft and Facebook, but trading for half the multiple. It is much more profitable than Amazon and also growing at a higher pace, but trading for a quarter of the valuation multiple. At this point, profitability and growth of Alibaba on the one side and the valuation multiple on the other side does not add up. And we have to ask the question, why Alibaba is trading for such a low multiple although it is outperforming many of its peers that trade for much higher multiples.</p>\n<p><b>Risks</b></p>\n<p>When looking at the past performance of Alibaba, we can see, that steep selloffs are quite common as a similar sell-off happened already three times since the IPO in 2014 with the steepest sell-off being more than 50% off the previous high.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4da83a08f0dcfc73534c206e43cb09d3\" tg-width=\"635\" tg-height=\"403\"><span>Data byYCharts</span></p>\n<p>While this might help us a bit, we are still facing high levels of uncertainty and investors usually don’t like uncertainty. Basically, this uncertainty can be summed up in one short sentence: The tense relationship between Alibaba’s founder Jack Ma and the Chinese government is worrying for investors. And this tense relationship is exemplified by several events. It started last year, when the IPO of the company’s fintech affiliate Ant Financial was cancelled. </p>\n<p>This was followed by theinitiation of an antitrust investigation, in which it is investigated if Alibaba had engaged in monopolistic practices (like preventing vendors from selling on other platforms). Additionally, new supervision for Ant Group was also discussed. And finally, at the end of 2020, Jack Ma went missing and it took about three months before the public would hear from him again – another worrying aspect for investors.</p>\n<p>As long as we are talking about risks, there are other aspect I like to mention. I compared Alibaba to Amazon above – and I still think that comparison is appropriate. But we also have to acknowledge, that Alibaba growth potential is limited as the company is mostly focused on China and might have more difficulties to expand globally – compared to Amazon. But considering the growing middle class in China and the high pace with which the economy is still growing we should not worry too much about Alibaba’s growth potential.</p>\n<p>There is a final risk Imentioned in my last article about Tencentand that risk is also applying to Alibaba:</p>\n<blockquote>\n And a final risk is the fact that Tencent is a Chinese company. It is especially difficult to understand different trends before they are happening and predict the future, but while I am familiar with the German culture and the people (habits, preferences, etc.) and can deal with similar countries like France, the United Kingdom, Sweden or the United States, it is rather difficult for me to understand and analyze the consumer behavior and preferences of the Chinese population. This makes it difficult to assess the potential and development of the products and services Tencent offers.\n</blockquote>\n<p>But despite all these issues, there is a comparison I like very much. Very recently,one of my fellow contributorscompared Alibaba’s situation right now to Facebook a few years ago, when it was facing the Cambridge Analytics scandal and also trading for extremely low multiples due to the uncertainties. And it is also interesting, that Wall Street analysts as well as Seeking Alpha contributors are extremely bullish about Alibaba right now.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/44d2ece5c1460e539c9fd4fb4ba63bf7\" tg-width=\"640\" tg-height=\"195\"><span>(Source:Seeking Alpha)</span></p>\n<p><b>Balance Sheet</b></p>\n<p>When facing challenges, it is especially reassuring if we are dealing with a solid balance sheet enabling the company to withstand challenges and stormy market conditions. And similar to many companies mentioned above – like Facebook or Alphabet – Alibaba also has a great balance sheet. We don’t have to worry about high debt levels although Alibaba has current bank borrowings of RMB 3.6 billion and non-current bank borrowings of RMB 38.3 billion on its balance sheet. But compared to a total equity of RMB 1,075 billion, we get a D/E ratio of 0.04, which is negligible. Aside from the debt, the biggest problem is probably the company’s goodwill. On March 31, 2021, Alibaba had RMB 292.8 billion in goodwill. This means, that 17.3% of total assets (RMB 1,690 billion) is goodwill.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/532919e61e3feb83d46cbce44e3f3c42\" tg-width=\"640\" tg-height=\"354\"><span>(Source:Alibaba Q4/21 Earnings Release)</span></p>\n<p>But aside from goodwill, Alibaba also has RMB 321.3 billion in cash and cash equivalents as well as RMB 152.4 billion in short-term investments on its balance sheet. Aside from these rather liquid assets, Alibaba also has RMB 237.2 billion in equity securities and other investments, that are also worth mentioning. I included a screenshot of the latest balance sheet, which is also including the numbers in US$. Especially $72 billion in very liquid assets give Alibaba a lot of “financial power” and the ability to negative troubles.</p>\n<p><b>Intrinsic Value Calculation</b></p>\n<p>I already mentioned above that Alibaba is trading at rather low multiples – at least when compared to its peers and especially for a company growing with a high pace. And compared to the company’s history, the stock is right now trading almost for its lowest P/FCF ratio since the IPO. A few times – in 2016, 2018 and 2020 – the stock was trading at a similar low P/FCF ratio. From that point of view, Alibaba has to be considered extremely cheap.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d1da4ac18557b21c43feb2a338de9a3b\" tg-width=\"640\" tg-height=\"221\"><span>(Source:Seeking Alpha Charting)</span></p>\n<p>When you are familiar with my past articles, you know that I don’t just use valuation multiples but also a discount cash flow analysis, which is considered to be much more precise (although we have to make a lot more assumptions). When taking the free cash flow of fiscal 2021 (RMB 172.7 billion) as basis, Alibaba has to grow about 5.5% annually from now till perpetuity for the stock to be fairly valued (the intrinsic value is RMB 1,367; discount rate 10%).</p>\n<p>Instead, we can also calculate with more realistic growth rates. If we assume, that Alibaba won’t go under, we have to assume at least 20% growth for the next year. Let’s be rather pessimistic and assume, that growth will slowly decline over the next decade and in 10 years from now, the growth rate will only be 6% till perpetuity. When using these numbers, we get an intrinsic value of&nbsp;<b>RMB 2,596</b>. And we have to assume, that these growth assumptions are rather cautious for a company like Alibaba.</p>\n<p><b>Conclusion</b></p>\n<p>So far, we talked about risks, about past growth rates, compared Alibaba to its peers and provided an intrinsic value calculation. I also wanted to write about the growth potential as well as the wide economic moat, that Alibaba has without any doubt – similar toAmazon,FacebookorTencent. But the article would probably be too long then. Instead, I included links to three articles in which I described the economic moat of these businesses.</p>\n<p>When summing up, it is quite simple. When we assume, that Alibaba is in serious trouble and might be brought down in some way or is facing troubles, that will seriously mess with the company’s ability to grow, we should not invest in Alibaba. These risks are present, and we actually don’t know what could happen in the coming quarters (or years). However, I consider it extremely unlikely, that China will destroy its second most-valuable company. If we assume on the other side, that this is just a small hick-up and troubles Alibaba can work through in the coming quarters and Alibaba will continue to perform in a similar way as in the past (even with growth rates slowing down), Alibaba is probably one of the most undervalued stocks out there and an extreme bargain.</p>","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: One Of The Really Cheap Bargains In This Market</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; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\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: One Of The Really Cheap Bargains In This Market\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-01 20:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4432358-alibaba-one-of-the-really-cheap-bargains-in-market><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nAlibaba is one of the largest corporations in the world and focusing on retail, cloud and payment services.\nThe company is clearly facing risks due to the tension between Jack Ma and the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4432358-alibaba-one-of-the-really-cheap-bargains-in-market\">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/4432358-alibaba-one-of-the-really-cheap-bargains-in-market","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1138216687","content_text":"Summary\n\nAlibaba is one of the largest corporations in the world and focusing on retail, cloud and payment services.\nThe company is clearly facing risks due to the tension between Jack Ma and the Chinese government, but I consider these risks to be only temporary.\nAlibaba is growing with a high pace, has a very stable balance sheet and outperforming many of its peers.\nIn my opinion, the stock is severely undervalued.\n\nPhoto by maybefalse/iStock Unreleased via Getty Images\nSo far, I have published over 300 articles on this site and the focus has been clearly on companies having the headquarters in the United States and stocks listed on an US-based stock exchange. And while I am covering also companies from Germany, France, Great Britain, Sweden or Denmark, I have avoided one country almost completely although it has many interesting investment opportunities: Mainland China.The only company I covered so far is Tencent Holdings Limited (OTCPK:TCEHY).\nAnd although China has hundreds or thousands of successful companies, most of them are almost unknown in the Western Hemisphere (especially when moving outside of the investing world). And while most investors are familiar with Tencent, there is at least one other company almost every investor has heard of: Alibaba Group Holding Limited (BABA). In the following article, I will analyze Alibaba in my usual way. I will try to determine if Alibaba is a solid business with a wide economic moat and try to answer the question if Alibaba is a solid investment right now.\nBusiness Description\nAlibaba Group was founded in 1999 by 18 individuals. Nevertheless, one of these 18 stands out – the former English teacher from Hangzhou, Jack Ma. Over the years, Alibaba evolved in a multinational technology company and with a market capitalization of $570 billion, Alibaba is on the 10thspot on the list of most valuable companies in the world (by market cap). And behind Tencent, which is on the 7thspot on that list, Alibaba is the second most valuable company in China.\nWhile Alibaba is mostly focused on e-commerce and retail operations, the Alibaba Group is actually a holding company with many different sales services. This includes C2C services, B2C services and B2B services. Aside from retail, the Alibaba Group also offers electronic payment services, shipping search engines and could computing services. The group owns and operates a diverse portfolio of companies around the world in numerous business sectors.\n(Source:Alibaba Q4/20 Presentation)\nAlibaba is reporting in four different segments:\n\nCore Commerce Revenue: This segment is comprised of platforms operating in retail and wholesale commerce in China as well as logistics services and local consumer services. In fiscal 2021, this segment generated RMB 621.1 billion in revenue and RMB 159 billion in income from operations.\nCloud Computing Revenue: This segment is comprised of Alibaba Cloud, which offers different cloud services to customers worldwide like database, storage, big data analytics, a machine learning platform and large-scale computing security. In fiscal 2021, this segment generated RMB 60.1 billion, but the segment was not profitable so far (a loss of RMB 9 billion).\nDigital Media and Entertainment Revenue: This segment uses the deep data insights to serve the broader interests of consumers through key distribution platforms Youku and Alibaba Pictures as well as other content platforms that provide online videos, films, live events, literature and music. In fiscal 2021, this segment generated RMB 31.2 billion, but was also not profitable.\nInnovation Initiatives and Others Revenue: This segment includes businesses like Amap, DingTalk, Tmall Genie and others. In fiscal 2021, this segment generated RMB 4.8 billion in revenue, but also an operating loss.\n\n(Source: Alibaba Q4/20 Presentation)\nWhen looking at the last annual results (fiscal 2021), Alibaba generated RMB 717.3 billion in revenue. Compared to fiscal 2020 (RMB 509.7 billion) this is reflecting an increase of 41%. Adjusted EBITDA in fiscal 2021 was RMB 196.8 billion – an increase of 25% compared to fiscal 2020 (adjusted EBITA of RMB 157.7 billion). Diluted earnings per share actually decreased from RMB 6.99 in fiscal 2020 to RMB 6.84 in fiscal 2021 – reflecting a decrease of 2.1%. But we should not pay too much attention to the earnings per share. Instead, it makes much more sense to look at the free cash flow Alibaba is generating. In fiscal 2021, Alibaba generated RMB 172.7 billion in free cash flow compared to RMB 130.9 billion in free cash flow one year earlier.\nStrong Business Among Strong Competitors\nWhat is striking when looking at Alibaba – and what has been discussed several times – is the low multiple for which Alibaba is currently trading. When using the trailing twelve-month GAAP numbers, Alibaba is trading for 25 times earnings, when using the non-GAAP forward numbers, it is trading for a P/E ratio of 20.\nWe can compare Alibaba to its peers – companies like Amazon (AMZN), Tencent, Facebook (FB), Microsoft (MSFT) or Alphabet (GOOG). And Alibaba actually belongs in that list as it is not only operating in similar business segments, but it is also growing with similarly high rates. And Alibaba is not only growing with a similar pace; it is actually outperforming most of its peers.\n(Source:Alibaba 2020 Investor Presentations)\nWhile Alibaba is growing with a similar pace like these companies, it is trading for a completely different multiple. Right now, Alibaba is trading for a price-cash-flow ratio of 17, while competitors like Tencent, Facebook or Microsoft are trading for a P/FCF ratio between 35 and 40. It is striking, that the market is assigning these competitors a multiple twice as high and Amazon is actually trading for a multiple more than 4 times higher (price-free-cash-flow ratio of 76).\nData by YCharts\nRight now, readers might point out, that the comparison to Amazon is misleading as Amazon is still spending a lot of money to achieve future growth and therefore has a lower profit than other companies. And it certainly is true, that Amazon is still focusing on top line growth – sometimes at the expense of bottom-line growth – but so does Alibaba.\nWhile Amazon spent 10.4% of its revenue as capital expenditures in the last fiscal year, Alibaba spent almost the same amount – 8.9% of revenue. And when looking at the expenses for research and development, we once again see similar numbers. In the last five years, Amazon spent 12.16% of revenue on R&D on average while Alibaba spent 10.38% of its revenue on R&D.\nBut while these numbers are quite similar for both companies – Amazon is spending a bit more on R&D than Alibaba – the free cash flow these two companies can generate is completely different. While Amazon only generated 6.7% of revenue as free cash flow in the last fiscal year, Alibaba generated 26.5% of revenue as free cash flow in the last fiscal year – almost four times higher.\nAnd Alibaba is not only extremely profitable – it was growing with an extremely high pace in the past. During the past ten years, Alibaba could not only grow revenue every single year, it also grew revenue with a CAGR of 62.6%. Earnings per share fluctuated a little bit during these ten years but grew with an even higher pace – a CAGR of 76.29% during the last decade. And finally, free cash flow increased with a CAGR of 59.62% during the last decade.\n(Source: Author’s work based on numbers from Morningstar)\nWhen looking at Alibaba’s growth rates in the last few years compared to its competitors, Alibaba is also outperforming. When looking at the revenue CAGR of the last 5 years, we get the following numbers:\n\nAmazon: 29.26%\nFacebook: 36.82%\nTencent: 36.20%\nAlphabet: 19.47%\nMicrosoft: 8.85%\nAlibaba: 46.24%\n\nWe can spin it how we want: Alibaba is an extremely profitable company growing with extremely high rates but is trading at an extremely low multiple compared to its competitors. It is growing with a higher pace than Microsoft and Facebook, but trading for half the multiple. It is much more profitable than Amazon and also growing at a higher pace, but trading for a quarter of the valuation multiple. At this point, profitability and growth of Alibaba on the one side and the valuation multiple on the other side does not add up. And we have to ask the question, why Alibaba is trading for such a low multiple although it is outperforming many of its peers that trade for much higher multiples.\nRisks\nWhen looking at the past performance of Alibaba, we can see, that steep selloffs are quite common as a similar sell-off happened already three times since the IPO in 2014 with the steepest sell-off being more than 50% off the previous high.\nData byYCharts\nWhile this might help us a bit, we are still facing high levels of uncertainty and investors usually don’t like uncertainty. Basically, this uncertainty can be summed up in one short sentence: The tense relationship between Alibaba’s founder Jack Ma and the Chinese government is worrying for investors. And this tense relationship is exemplified by several events. It started last year, when the IPO of the company’s fintech affiliate Ant Financial was cancelled. \nThis was followed by theinitiation of an antitrust investigation, in which it is investigated if Alibaba had engaged in monopolistic practices (like preventing vendors from selling on other platforms). Additionally, new supervision for Ant Group was also discussed. And finally, at the end of 2020, Jack Ma went missing and it took about three months before the public would hear from him again – another worrying aspect for investors.\nAs long as we are talking about risks, there are other aspect I like to mention. I compared Alibaba to Amazon above – and I still think that comparison is appropriate. But we also have to acknowledge, that Alibaba growth potential is limited as the company is mostly focused on China and might have more difficulties to expand globally – compared to Amazon. But considering the growing middle class in China and the high pace with which the economy is still growing we should not worry too much about Alibaba’s growth potential.\nThere is a final risk Imentioned in my last article about Tencentand that risk is also applying to Alibaba:\n\n And a final risk is the fact that Tencent is a Chinese company. It is especially difficult to understand different trends before they are happening and predict the future, but while I am familiar with the German culture and the people (habits, preferences, etc.) and can deal with similar countries like France, the United Kingdom, Sweden or the United States, it is rather difficult for me to understand and analyze the consumer behavior and preferences of the Chinese population. This makes it difficult to assess the potential and development of the products and services Tencent offers.\n\nBut despite all these issues, there is a comparison I like very much. Very recently,one of my fellow contributorscompared Alibaba’s situation right now to Facebook a few years ago, when it was facing the Cambridge Analytics scandal and also trading for extremely low multiples due to the uncertainties. And it is also interesting, that Wall Street analysts as well as Seeking Alpha contributors are extremely bullish about Alibaba right now.\n(Source:Seeking Alpha)\nBalance Sheet\nWhen facing challenges, it is especially reassuring if we are dealing with a solid balance sheet enabling the company to withstand challenges and stormy market conditions. And similar to many companies mentioned above – like Facebook or Alphabet – Alibaba also has a great balance sheet. We don’t have to worry about high debt levels although Alibaba has current bank borrowings of RMB 3.6 billion and non-current bank borrowings of RMB 38.3 billion on its balance sheet. But compared to a total equity of RMB 1,075 billion, we get a D/E ratio of 0.04, which is negligible. Aside from the debt, the biggest problem is probably the company’s goodwill. On March 31, 2021, Alibaba had RMB 292.8 billion in goodwill. This means, that 17.3% of total assets (RMB 1,690 billion) is goodwill.\n(Source:Alibaba Q4/21 Earnings Release)\nBut aside from goodwill, Alibaba also has RMB 321.3 billion in cash and cash equivalents as well as RMB 152.4 billion in short-term investments on its balance sheet. Aside from these rather liquid assets, Alibaba also has RMB 237.2 billion in equity securities and other investments, that are also worth mentioning. I included a screenshot of the latest balance sheet, which is also including the numbers in US$. Especially $72 billion in very liquid assets give Alibaba a lot of “financial power” and the ability to negative troubles.\nIntrinsic Value Calculation\nI already mentioned above that Alibaba is trading at rather low multiples – at least when compared to its peers and especially for a company growing with a high pace. And compared to the company’s history, the stock is right now trading almost for its lowest P/FCF ratio since the IPO. A few times – in 2016, 2018 and 2020 – the stock was trading at a similar low P/FCF ratio. From that point of view, Alibaba has to be considered extremely cheap.\n(Source:Seeking Alpha Charting)\nWhen you are familiar with my past articles, you know that I don’t just use valuation multiples but also a discount cash flow analysis, which is considered to be much more precise (although we have to make a lot more assumptions). When taking the free cash flow of fiscal 2021 (RMB 172.7 billion) as basis, Alibaba has to grow about 5.5% annually from now till perpetuity for the stock to be fairly valued (the intrinsic value is RMB 1,367; discount rate 10%).\nInstead, we can also calculate with more realistic growth rates. If we assume, that Alibaba won’t go under, we have to assume at least 20% growth for the next year. Let’s be rather pessimistic and assume, that growth will slowly decline over the next decade and in 10 years from now, the growth rate will only be 6% till perpetuity. When using these numbers, we get an intrinsic value of RMB 2,596. And we have to assume, that these growth assumptions are rather cautious for a company like Alibaba.\nConclusion\nSo far, we talked about risks, about past growth rates, compared Alibaba to its peers and provided an intrinsic value calculation. I also wanted to write about the growth potential as well as the wide economic moat, that Alibaba has without any doubt – similar toAmazon,FacebookorTencent. But the article would probably be too long then. Instead, I included links to three articles in which I described the economic moat of these businesses.\nWhen summing up, it is quite simple. When we assume, that Alibaba is in serious trouble and might be brought down in some way or is facing troubles, that will seriously mess with the company’s ability to grow, we should not invest in Alibaba. These risks are present, and we actually don’t know what could happen in the coming quarters (or years). However, I consider it extremely unlikely, that China will destroy its second most-valuable company. If we assume on the other side, that this is just a small hick-up and troubles Alibaba can work through in the coming quarters and Alibaba will continue to perform in a similar way as in the past (even with growth rates slowing down), Alibaba is probably one of the most undervalued stocks out there and an extreme bargain.","news_type":1},"isVote":1,"tweetType":1,"viewCount":227,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":109547588,"gmtCreate":1619707053344,"gmtModify":1704271164246,"author":{"id":"3581239622700429","authorId":"3581239622700429","name":"低调的投资者","avatar":"https://static.tigerbbs.com/cf89402cee9fd8f39781c1abc4d5f1a7","crmLevel":4,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3581239622700429","authorIdStr":"3581239622700429"},"themes":[],"htmlText":"Which one is better choice?","listText":"Which one is better choice?","text":"Which one is better choice?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/109547588","repostId":"1117027267","repostType":4,"repost":{"id":"1117027267","kind":"news","pubTimestamp":1619697587,"share":"https://ttm.financial/m/news/1117027267?lang=&edition=fundamental","pubTime":"2021-04-29 19:59","market":"us","language":"en","title":"Like Discounts? These Game-Changing Stocks Are 40% (or More) Below Their 52-Week Highs","url":"https://stock-news.laohu8.com/highlight/detail?id=1117027267","media":"Motley Fool","summary":"History says that if you buy high-quality businesses and hang onto them for long periods of time, yo","content":"<p>History says that if you buy high-quality businesses and hang onto them for long periods of time, you'll have a very good chance of making money. After all, the<b>S&amp;P 500</b>hasn't had a rolling 20-year period between 1919 and 2020 where an investor would have lost money, inclusive of dividends paid.</p>\n<p>However, it's psychologically tougher to convince ourselves to put money to work in the market when it's regularly hitting new all-time highs. We want to feel like we're getting a good price when we buy equities, but that can be tough to accomplish when the benchmark S&amp;P 500 is breaking records on a near-weekly basis.</p>\n<p>But I have good news: Discounts on great stocks<i>are</i>available, if you're willing to do a bit of digging.</p>\n<p>There are currently three game-changing stocks at the forefront of innovation in their respective industries that are all down at least 40% from their respective 52-week (and all-time) highs. Best of all, they look like serious bargains relative to where they stood just a few months ago.</p>\n<p><img src=\"https://static.tigerbbs.com/6c403da53ca4bd71a1178c7e35629817\" tg-width=\"700\" tg-height=\"465\" referrerpolicy=\"no-referrer\"></p>\n<p>IMAGE SOURCE: GETTY IMAGES.</p>\n<p><b>Teladoc Health: 41% below its 52-week high</b></p>\n<p>Amonghealthcare stocks, few, if any, were aided more by the pandemic in 2020 than telemedicine-services provider<b>Teladoc Health</b>(NYSE:TDOC). Yet in spite of its huge year, Teladoc's share price has pulled back approximately 41% from its all-time and 52-week high, set in mid-February. That's a bargain ripe for the picking.</p>\n<p>Last year, with physicians wanting to keep at-risk and potentially infected patients out of their offices, demand for virtual visits soared. Teladoc handled 156% more virtual visits in 2020 than it did in the preceding year.</p>\n<p>Though there have been some concerns as to what would happen to Teladoc once the pandemic ended, the company's growth trajectory and healthcare-benefit profileprojects well for its future. Telehealth is considerably more convenient for patients and can allow doctors to more easily touch base with chronically ill patients.</p>\n<p>It's also a big win for insurance companies. Virtual visits are typically billed at a lower rate than office visits, and more frequent consultations with chronically ill patients might lead to better long-term outcomes (i.e., lower long-term expenses). These benefits are precisely why Teladoc's sales grew by an annual average rate of 74% between 2012 and 2019.</p>\n<p>Another reason you're going to want to own Teladoc is itsrecent acquisition of applied health-signals company Livongo Health. Livongo utilizes patient data and artificial intelligence to send its members tips and nudges that are designed to help them lead healthier lives. Once again, we're talking about improving patient outcomes, which is something health insurers are going to get behind.</p>\n<p>Livongo has already courted more than 500,000 diabetes members and has plans to include patients with hypertension and weight-management issues. In other words, its patient pool encompasses a large percentage of the U.S. population.</p>\n<p>Look for Teladoc Health to potentially quintuple its annual sales by mid-decade to north of $5.6 billion, according to Wall Street's consensus estimate.</p>\n<p><img src=\"https://static.tigerbbs.com/5fca19ebbe0e88c23fe3449884bad2c4\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"></p>\n<p>IMAGE SOURCE: GETTY IMAGES.</p>\n<p><b>Fastly: 50% below its 52-week high</b></p>\n<p>If you like sifting for discounts, you're going to love edge cloud-services provider<b>Fastly</b>(NYSE:FSLY). Since peaking at $136.50 in mid-October, shares of Fastly have given back half their value. That discountmakes little sense for long-term minded investors.</p>\n<p>Like Teladoc, Fastly was uniquely positioned to benefit from the pandemic. The company is primarily responsible for expediting the delivery of content, including images, video, and streaming, to end users in a secure manner. With people stuck in their homes during the pandemic, consumers and workers went online and into the cloud. This meant a big uptick in demand for content-delivery network services.</p>\n<p>Even though Fastly's new customer growth slowed a bit in the fourth quarter and it forecast a wider-than-anticipated loss in 2021 as it reinvests in growth initiatives and hires more people, the proof is in the pudding that its customers approve of its services. Last year, Fastly had a revenue-retention rate of 99% and adollar-based net expansion rate (DBNER) of 147% and 143%, respectively, in the third and fourth quarters. In plainer English, DNBER tells us that existing clients spent a respective 47% and 43% more in Q3 2020 and Q4 2020, respectively, than they did in the year-ago quarters (Q3 2019 and Q4 2019).</p>\n<p>Just as impressive, we saw Fastly overcome an operational hurdle in the third quarter. During the first half of 2020, popular social media platform TikTok accounted for an eighth of total sales. But with TikTok parent ByteDance quarreling with the Trump administration stateside, it pulled most of its traffic from Fastly's network.</p>\n<p>What looked devastating proved ultimately harmless. Full-year sales grew by 45% to $291 million and adjusted gross margin expanded 430 basis points to 60.9%.</p>\n<p>Fastly's business is set up perfectly to take advantage of increased content-delivery demand over time. This high-margin, usage-based modelshould make Fastly and its investors rich.</p>\n<p><img src=\"https://static.tigerbbs.com/5dabb0b68fe32e12c1462accee7e973b\" tg-width=\"700\" tg-height=\"474\" referrerpolicy=\"no-referrer\"></p>\n<p>IMAGE SOURCE: GETTY IMAGES.</p>\n<p><b>Zoom Video Communications: 43% below its 52-week high</b></p>\n<p>A final game-changing stock that's been substantially discounted in recent months is web-conferencing giant<b>Zoom Video Communications</b>(NASDAQ:ZM). Since peaking at almost $589 a share on Oct. 19, 2020, the company has since given back 43% of its value through this past weekend.</p>\n<p>Not to sound like a broken record, but Zoom Video was also amajor beneficiary of the pandemic. When the coronavirus shut down traditional offices, workplaces shifted to people's homes. To keep projects going, businesses big and small began turning to web conferencing. This is why Zoom reported $2.65 billion in sales last year, which represented a 326% increase from the prior-year period.</p>\n<p>One of the big reasons Zoom has been such a success is the company's freemium lure. Zoom offers a free trial of its cloud-based conferencing solutions that's proved highly effective at getting businesses to subscribe. In particular, the company's conferencing solutions have really resonated with small-and-medium-sized businesses. Last year, customers contributing at least $100,000 in trailing-12-month revenue rose 156%. But the number of customers with at least 10 employeessurged 470% to 467,100.</p>\n<p>And have I mentioned the sheer dominance? According to Datanyze, Zoomcontrols just shy of 40% of the U.S. web-conferencing market. That's essentially double its next-closest competitor, and makes it the logical choice for most businesses.</p>\n<p>The efficiencies that Zoom's platform provides businesses makes it highly unlikely that we're going to see its growth slow dramatically in the coming years. If anything, Zoom's cash flow windfall gives it the incentive to expand its services beyond web conferencing.</p>\n<p>Like Teladoc, Zoom looks to be on pace to roughly quintuple its sales over the next five years.</p>","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>Like Discounts? These Game-Changing Stocks Are 40% (or More) Below Their 52-Week Highs</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; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\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\">\nLike Discounts? These Game-Changing Stocks Are 40% (or More) Below Their 52-Week Highs\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-29 19:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/04/29/like-discounts-game-changing-stocks-40-below-highs/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>History says that if you buy high-quality businesses and hang onto them for long periods of time, you'll have a very good chance of making money. After all, theS&P 500hasn't had a rolling 20-year ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/04/29/like-discounts-game-changing-stocks-40-below-highs/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"ZM":"Zoom","TDOC":"Teladoc Health Inc.","FSLY":"Fastly, Inc."},"source_url":"https://www.fool.com/investing/2021/04/29/like-discounts-game-changing-stocks-40-below-highs/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1117027267","content_text":"History says that if you buy high-quality businesses and hang onto them for long periods of time, you'll have a very good chance of making money. After all, theS&P 500hasn't had a rolling 20-year period between 1919 and 2020 where an investor would have lost money, inclusive of dividends paid.\nHowever, it's psychologically tougher to convince ourselves to put money to work in the market when it's regularly hitting new all-time highs. We want to feel like we're getting a good price when we buy equities, but that can be tough to accomplish when the benchmark S&P 500 is breaking records on a near-weekly basis.\nBut I have good news: Discounts on great stocksareavailable, if you're willing to do a bit of digging.\nThere are currently three game-changing stocks at the forefront of innovation in their respective industries that are all down at least 40% from their respective 52-week (and all-time) highs. Best of all, they look like serious bargains relative to where they stood just a few months ago.\n\nIMAGE SOURCE: GETTY IMAGES.\nTeladoc Health: 41% below its 52-week high\nAmonghealthcare stocks, few, if any, were aided more by the pandemic in 2020 than telemedicine-services providerTeladoc Health(NYSE:TDOC). Yet in spite of its huge year, Teladoc's share price has pulled back approximately 41% from its all-time and 52-week high, set in mid-February. That's a bargain ripe for the picking.\nLast year, with physicians wanting to keep at-risk and potentially infected patients out of their offices, demand for virtual visits soared. Teladoc handled 156% more virtual visits in 2020 than it did in the preceding year.\nThough there have been some concerns as to what would happen to Teladoc once the pandemic ended, the company's growth trajectory and healthcare-benefit profileprojects well for its future. Telehealth is considerably more convenient for patients and can allow doctors to more easily touch base with chronically ill patients.\nIt's also a big win for insurance companies. Virtual visits are typically billed at a lower rate than office visits, and more frequent consultations with chronically ill patients might lead to better long-term outcomes (i.e., lower long-term expenses). These benefits are precisely why Teladoc's sales grew by an annual average rate of 74% between 2012 and 2019.\nAnother reason you're going to want to own Teladoc is itsrecent acquisition of applied health-signals company Livongo Health. Livongo utilizes patient data and artificial intelligence to send its members tips and nudges that are designed to help them lead healthier lives. Once again, we're talking about improving patient outcomes, which is something health insurers are going to get behind.\nLivongo has already courted more than 500,000 diabetes members and has plans to include patients with hypertension and weight-management issues. In other words, its patient pool encompasses a large percentage of the U.S. population.\nLook for Teladoc Health to potentially quintuple its annual sales by mid-decade to north of $5.6 billion, according to Wall Street's consensus estimate.\n\nIMAGE SOURCE: GETTY IMAGES.\nFastly: 50% below its 52-week high\nIf you like sifting for discounts, you're going to love edge cloud-services providerFastly(NYSE:FSLY). Since peaking at $136.50 in mid-October, shares of Fastly have given back half their value. That discountmakes little sense for long-term minded investors.\nLike Teladoc, Fastly was uniquely positioned to benefit from the pandemic. The company is primarily responsible for expediting the delivery of content, including images, video, and streaming, to end users in a secure manner. With people stuck in their homes during the pandemic, consumers and workers went online and into the cloud. This meant a big uptick in demand for content-delivery network services.\nEven though Fastly's new customer growth slowed a bit in the fourth quarter and it forecast a wider-than-anticipated loss in 2021 as it reinvests in growth initiatives and hires more people, the proof is in the pudding that its customers approve of its services. Last year, Fastly had a revenue-retention rate of 99% and adollar-based net expansion rate (DBNER) of 147% and 143%, respectively, in the third and fourth quarters. In plainer English, DNBER tells us that existing clients spent a respective 47% and 43% more in Q3 2020 and Q4 2020, respectively, than they did in the year-ago quarters (Q3 2019 and Q4 2019).\nJust as impressive, we saw Fastly overcome an operational hurdle in the third quarter. During the first half of 2020, popular social media platform TikTok accounted for an eighth of total sales. But with TikTok parent ByteDance quarreling with the Trump administration stateside, it pulled most of its traffic from Fastly's network.\nWhat looked devastating proved ultimately harmless. Full-year sales grew by 45% to $291 million and adjusted gross margin expanded 430 basis points to 60.9%.\nFastly's business is set up perfectly to take advantage of increased content-delivery demand over time. This high-margin, usage-based modelshould make Fastly and its investors rich.\n\nIMAGE SOURCE: GETTY IMAGES.\nZoom Video Communications: 43% below its 52-week high\nA final game-changing stock that's been substantially discounted in recent months is web-conferencing giantZoom Video Communications(NASDAQ:ZM). Since peaking at almost $589 a share on Oct. 19, 2020, the company has since given back 43% of its value through this past weekend.\nNot to sound like a broken record, but Zoom Video was also amajor beneficiary of the pandemic. When the coronavirus shut down traditional offices, workplaces shifted to people's homes. To keep projects going, businesses big and small began turning to web conferencing. This is why Zoom reported $2.65 billion in sales last year, which represented a 326% increase from the prior-year period.\nOne of the big reasons Zoom has been such a success is the company's freemium lure. Zoom offers a free trial of its cloud-based conferencing solutions that's proved highly effective at getting businesses to subscribe. In particular, the company's conferencing solutions have really resonated with small-and-medium-sized businesses. Last year, customers contributing at least $100,000 in trailing-12-month revenue rose 156%. But the number of customers with at least 10 employeessurged 470% to 467,100.\nAnd have I mentioned the sheer dominance? According to Datanyze, Zoomcontrols just shy of 40% of the U.S. web-conferencing market. That's essentially double its next-closest competitor, and makes it the logical choice for most businesses.\nThe efficiencies that Zoom's platform provides businesses makes it highly unlikely that we're going to see its growth slow dramatically in the coming years. If anything, Zoom's cash flow windfall gives it the incentive to expand its services beyond web conferencing.\nLike Teladoc, Zoom looks to be on pace to roughly quintuple its sales over the next five years.","news_type":1},"isVote":1,"tweetType":1,"viewCount":152,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"defaultTab":"following","isTTM":true}