Alibaba stock trading cheaply due to weak Chinese retail market and e-commerce competition

From Nasdaq: 2025-01-27 00:32:26

Alibaba stock has gained 12% in 2024 but remains down over 70% from 2020 highs. Trading at $85 per share, it’s under 10x projected FY’25 earnings. Factors holding it back include weak Chinese retail market and e-commerce competition. Stimulus measures and international growth could provide catalysts for recovery.

Alibaba’s Q2 FY’25 results showed 5% revenue growth to 236.5 billion yuan and 58% net income surge to 43.9 billion yuan. China’s retail market weakness and e-commerce competition affect revenue growth. New fee model and digital marketing tools aim to boost revenue. Cloud computing business shows growth potential with AI initiatives.

Alibaba’s international e-commerce platforms and cloud computing business are growth drivers. Cloud Intelligence Group saw 7% sales growth to 29.6 billion yuan, driven by public cloud and AI-related revenue. BABA stock underperformed the market in the last 4 years. Potential upside with valuation estimated at $108 per share, indicating a 27% increase.



Read more at Nasdaq: Why Is Alibaba Stock Trading So Cheaply?