It isn’t surprising to see Alibaba finally join that list, since other Chinese tech giants like Baidu (BIDU -0.97%) and JD.com (JD -0.21%) were already added earlier this year. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. On one hand, there are early signs that Alibaba is heading toward a recovery after it reported a respectable growth in revenue in the latest quarter. Prior to today’s trading, shares of the online retailer had lost 8.7% over the past month.
- And the good news for Alibaba is that consumers are increasingly choosing to shop with their phones.
- However, that also represented a deceleration from the segment’s 34% growth in the previous quarter.
- The company also offers online marketing, cloud computing and a logistics operation.
- Clearly, Wu will need time to deliver results as the acting chairman and new CEO of the cloud division.
In its fiscal year report ending 31 March 2020, Alibaba announced that its annual revenue amounted to around 509.7 billion yuan, which is approximately 72 billion US dollars. The major part of the company’s revenue derives from various e-commerce marketplaces, with local e-commerce accounting for 65 per cent revenue share. Meanwhile, the cloud computing sector is also growing at its fastest, almost doubling every year since 2017.
This has lagged the Retail-Wholesale sector’s loss of 4.61% and the S&P 500’s loss of 4.45% in that time. If you are interested in Alibaba stock trading and are wondering “should I invest in Alibaba stock? ”, follow the BABA stock price live and spot the best trading opportunities at Capital.com. Since its launch on the US market, Alibaba shares have faced many price fluctuations. The stock soared from $56 per share in September 2015 to $208 per share in June 2018. It then swung back and forth, with the price of BABA shares falling as low as $132 in December 2018 and rising to its all-time high of $228.66 in January 2020.
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If Alibaba can maintain double-digit percentage revenue and earnings growth for at least a few more years, its stock will look like a bargain at its current forward price-to-earnings multiple. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. Today, Alibaba Group Holding operates a vast array of businesses in different sectors internationally. It is one of the largest retailers and e-commerce providers, which is also involved in internet and artificial intelligence technologies.
- The company’s first business was alibaba.com set up by the company’s founder Jack Ma in 1999.
- The key difference between Alibaba share trading through a long position with a CFD and buying a security is the leverage that is employed.
- Alibaba’s challenges in recent times have caused investors to be pessimistic about its future.
- We provide the technology infrastructure and marketing reach to help merchants, brands, retailers and other businesses to leverage the power of new technology to engage with their users and customers and operate in a more efficient way.
- The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Google Finance is currently unavailable as some international data providers no longer support your region. Alibaba’s new Group CEO, Eddie Wu Yongming, stepped up as acting chairman and CEO of Alibaba Cloud Intelligence alongside his role as the chairman of Taobao and Tmall Group.
So it’s not hard to see why advertisers find the websites so appealing. Instead it makes most of its revenue from advertising on its various sites. Alibaba’s growth in its core business overvalued stocks has allowed it to expand into new areas. It recently bought a controlling stake in a film business and 50% of China’s most successful football club, Guangzhou Evergrande.
It could also narrow its moat against other Chinese tech giants like Tencent (TCEHY -0.57%) and Baidu (BIDU -0.97%). In previous years, Alibaba relied on the higher-margin revenue from its domestic commerce unit to support the expansion of its unprofitable divisions. However, Alibaba’s adjusted EBITA margins withered over the past year as the regulatory, macroeconomic, and competitive headwinds squeezed its core profit engine. Still, a complete reversal of the business trajectory will not take place overnight. On the contrary, it will take at least a few quarters, if not years, for the new management team to execute a complete turnaround to get Alibaba back on its high-growth trajectory. Since going public in 2014, it has grown revenue by more than 30% annually.
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Let’s review Alibaba’s challenges and the possible outcomes of the delisting drama, and see if its stock can attract the bulls again. However, Alibaba’s stock has also been bid down because it faces unpredictable regulatory headwinds in China as well as the threat of delisting from U.S. stock exchanges. Those long-term risks might convince value-seeking investors to stick forex trading strategies with American tech stocks instead. Fortunately, there are signs that Alibaba’s fiscal 2023 performance was probably a one-off event. In the latest result for the quarter ended June 30, 2023, groupwide revenue grew by 14% year over year, and operating income surged 70%. Notably, all major business divisions (except the cloud division) grew revenue by double digits.
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We enable businesses to transform the way they market, sell and operate and improve their efficiencies. We provide the technology infrastructure and marketing reach to help merchants, brands, retailers and other businesses to leverage the power of new technology to engage with their users and customers and operate in a more efficient way. We also empower enterprises with our leading cloud infrastructure and services and enhanced work collaboration capabilities to facilitate their digital transformation and to support the growth of their businesses. But if investors don’t have access to the HK Stock Exchange, they might be forced to liquidate their shares. All those uncertainties have made it difficult to invest in Alibaba, even for bullish investors who believe its e-commerce and cloud businesses will gradually recover over the long term. That’s also why its stock still trades at just 10 times forward earnings.
Alibaba announces IPO of logistics unit, U.S.-listed shares pare losses
This is considered a short-term investment or trade, as CFDs tend to be used within shorter timeframes. Alibaba has faced slowing economic growth at home and tougher regulation from Beijing, resulting in billions being wiped off its share price. That jarring slowdown — which Alibaba blames on competitive, macro, and regulatory headwinds — will likely continue. For fiscal 2023, analysts expect Alibaba’s revenue to rise just 8%, for its adjusted EBITDA margin to slip to 18%, and for its adjusted earnings per share (EPS) to fall 5%.
Ok, we’ve finally got some good news for US-listed Chinese stocks, but will it be enough to wipe out recent reversals? Looks good so far.Ok, we’ve finally got some good news for US-listed Chinese stocks, but will it be enough to wipe out recent reversals? It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988.
U.S. Business Confidence Hits Record Low in China. Days of Outperformance May Be Over.
Alibaba’s result for the fiscal year ended March 31, 2023 reflected these challenges when revenue grew by just 2%. Worse, its crown jewel, the Chinese e-commerce business, reported a 1% decline in revenue for that year. Such a performance was unacceptable for a company that depended on e-commerce for most of its revenue and all of its profitability . Alibaba has its hands in a number of industries, including artificial intelligence research, payments technologies, cloud computing in addition to its flagship online retail operation. Shares of Chinese tech giant Alibaba fell 3.5% on Monday, after the company said in a surprise move that outgoing CEO Daniel Zhang will also be stepping down as chairman and CEO of its cloud business. The company also offers online marketing, cloud computing and a logistics operation.
The Motley Fool owns and recommends Baidu, JD.com, and Tencent Holdings. Only those with the temperament to handle these additional risks and the patience to wait for the company to execute its latest strategies should consider buying the stock. Mega-brand Alibaba has been given a much-needed boost after news Chinese covid restrictions could be easing.Mega-brand Alibaba has been given a much-needed momentum indicator formula boost after news Chinese covid restrictions could be easing. It’s likely part of Alibaba’s plans to split into 6 separate units, which was announced in March this year.It’s likely part of Alibaba’s plans to split into 6 separate units, which was announced in March this year. Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Firstly, they can buy shares in companies on the exchanges where they are listed. For instance, investing in Alibaba stock on the NYSE stock exchange, so you actually own a share in the company. This can be considered a long-term investment, as the individual is usually waiting for the price to rise over time.