BABA Stock Forecast: Is Alibaba Stock A Good Investment?

BABA Stock Forecast: Is Alibaba Stock A Good Investment?

Baba Stock Forecast: BABA Stock is technically bearish and the trade recommendation is a Strong Sell. The average 12-month Baba Stock Prediction is $150.2.


Latest BABA Stock Price

BABA Stock Forecast: Analyst Target

 Overall Average$150.2
Barclays$141
Citigroup$160
Morgan Stanley$150
Truist Securities$120
Benchmark$180

Baba Stock Price Prediction for the next 5 years

Alibaba Baba Stock Price Prediction 2023 is $127

Alibaba Baba Stock Price Prediction 2024 is $149

Alibaba Baba Stock Price Prediction 2025 is $163

Alibaba Baba Stock Price Prediction 2026 is $211

Alibaba Baba Stock Price Prediction 2027 is $238

Baba Stock Forecast: Technical Analysis (Weekly)

Performance on the last Trading Day

  • Open Price: $118.38
  • Close Price: $111.20
  • Gain/Loss: -6.07%
  • Overall Market Cap: $317,333,628,523

Understanding BABA Stock Prediction Using Technical Indicators

Alibaba stock has witnessed a surge since December 16th when the 50-day moving average (red line) formed a golden cross with the 200-day moving average (green line). BABA stock was below $90 back then and now (at the time of writing) BABA is trading over $110.

BABA Stock retreated below $120.

image 677

On the above 4-hour timeframe chart, BABA stock is technically bearish. The Baba net price is above the 50-day and the 200-day moving averages. On the last trading day, BABA closed 6.07% lower.

The sellers have outnumbered the buyers and with the current momentum, BABA stock is likely to fall lower. The 50-day MA is acting as the first support level for BABA. The 50-day MA is around $107.5. The first level of resistance for BABA stock is $121.

On the RSI chart, BABA is on a downtrend and it is on the verge of entering oversold territory. With more sellers entering the market BABA’s stock price is predicted to fall higher. The bears outnumbered the bulls. The RSI for Baba si 40.36.

image 676

The Stochastic Chart is highly discouraging for Baba. The Stoch RSI is within the oversold territory. The signal is a sell.

On the MACD, the trading volume for BABA has fallen. The MACD series proper has been below the 9-day EMA. The signal is a Sell.

  • Moving Averages: Sell
  • RSI: Sell
  • MACD: Sell
  • Stochastic RSI: Sell
  • Overall: Moderate Sell

Baba Stock Forecast: Q3 Result

Alibaba recorded 10% revenue growth in the 3rd quarter. It is the slowest quarterly year-on-year growth rate for the company since its 2014 U.S. listing.

  • The e-commerce firm reported adjusted earnings of $1.82 per U.S. share on revenue of $29.12 billion.
  • On a year-over-year basis, Alibaba’s earnings rose 15% while sales increased 3%. In the prior quarter revenue fell 4%.
  • Customer management revenue, largely from performance-based marketing services on Alibaba’s platforms, fell 1% year on year. 
  • Adjusted EBITDA margin came in at 18% for the quarter, down from 28% a year earlier.
  • Revenue at Alibaba’s cloud business grew 20% year-over-year to RMB19.54 billion
  • The e-commerce giant’s annual active consumers (AACs) inside China climbed to 979 million and outside China to 301 million, with quarterly net increases of over 26 million and 16 million, respectively.

China Q3 Result

  • Revenue: 242.58 billion ($38.06 billion) vs. 246.37 billion yuan estimated, a 10% year-on-year rise.
  • EPS: 16.87 ($2.65) yuan per share vs. 16.18 yuan per share estimateda 23year-on-year fall.

Baba Stock Forecast: News and Developments

  • Alibaba founder Jack Ma recently appeared in a short video that resurfaced during the New Year. The video was regarding advice to rural teachers. Jack Ma has been maintaining a low profile since China’s regulatory crackdown. The video had a message to the rural teachers amid the massive Covid surge. In the video, Ma cited the difficult and extraordinary year for the country.
  • Chinese tech leaders such as Alibaba, Pinduoduo, and Tencent Holdings want a good relationship with the US government.

Alibaba Group Takes a Fresh Look by Appointing New CFO

  • Alibaba Group Holdings Ltd has decided to reorganize its domestic and international businesses by appointing a new chief financial officer. The plan is to form two new units for e-commerce business- international digital commerce and China digital commerce to become more agile and to keep pace with changing scenarios in the market.
  • International digital commerce will manage AliExpress, Alibaba.com, and Lazada. The unit is expected to be headed by Jiang Fan. China’s digital commerce unit will manage the domestic business and will be headed by Trudy Dai, a founding member of Alibaba.
  • The company’s deputy chief financial officer Toby Xu will succeed Maggi Wu in April. Wu has helped to lead three Alibaba-related companies’ public listings and will continue to be on the executive director board for Alibaba.

Government Push for Growth After Months-Long Crackdown

  • Alibaba showed signs of recovery last week amid improved sentiments after Beijing’s move to bolster the economy. Shares soared as much as 12% on 7.12.2021 after being down by more than 30% in the last month.
  • China’s central bank announced on Monday (6.12.2021) that it plans to reduce most banks’ reserve requirements next week and as a result plans to pump 1.2 trillion yuan ($188 billion) of liquidity into the market. This step is a sign of policymakers’ concern over economic growth and so more easing measures should follow in the coming weeks.
  •  Alibaba has been struggling and slumped 58 percent from its February high after Beijing’s months-long crackdown on the technology sector targeting monopolistic practices by big giants and data security in these companies. These factors have kept investors at distance from Alibaba.

Alibaba Group Challenges in Near Term

  • For over a decade, Alibaba has been China’s e-commerce king but recently it is losing its position by the influx of competitors in the sector. Alibaba is seeing growth deaccelerating in customer management revenue (CMR) which grew at just 3% in the recent quarter, down from 20% growth in the same quarter a year ago.
  • ByteDance Ltd’s Douyin- sister app to TikTok and Pinduoduo Inc has taken a lead in rural and live streaming e-commerce.
  • Douyin boasts 600 million plus daily active users and also allowed merchants to open stores on its platform in 2018. On average, merchants spend 1871 minutes on average in October on Douyin and only 350 minutes on Taobao- the live-streaming platform of Alibaba Group.
  • Other competitors – Pinduoduo is popular in the rural markets due to rock bottom pricing and group buying model encouraging purchases to be shared on messaging platforms to get discounts. Its GMV surged 66% to 1.67 trillion yuan in 2020. So growth is much stronger than Alibaba’s recent results.
  • Other competitors include JD.com, Meituan, and Baidu, giants in search and food delivery are also venturing into e-commerce offerings, and smaller startups are targeting segments like footwear and makeup.
  • Alibaba has also been hurt by a regulatory crackdown and it is forced to abandon a policy facilitating merchants to set up exclusive shops on its platform. Analysts are not too optimistic that Alibaba can turn the situation in its favor and can regain its lost position in the market.

BABA Stock Forecast: A Future Outlook

  • Firstly, it is to be kept in mind that Alibaba is an established giant and is not supposed to show an exponential growth trajectory much like what is expected from newbies like Douyin. Also, it is well understood that the market will be shared among all the incomers and Alibaba is no exception to that.
  • Didi Global Inc’s’s decision to pull out from New York Stock Exchange has been adding pressure on US-listed Chinese firms and Alibaba investors have started swapping US-listed shares for Hong Kong stock to contain risk amid increasing Sino-US tensions. 
  • There has been an abundance of negative news, but Alibaba is holding the rope to battle it out and rise in difficult times by taking measures like appointing a new CFO and changing business modalities.
  • Finally, owning a giant at multiyear low valuations is not a bad idea, as Sun is expected to shine again on Alibaba by Government support as seen by China’s central bank measures.

-Vineet Agarwal

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

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