Baba Stock Forecast: Will Alibaba surge after strong earnings report?

Baba Stock Forecast: Will Alibaba surge after strong earnings report?

Baba Stock Forecast, 30th May: Overall Outlook is Negative for the stock.
Google Search Index is lower compared to 24 hours ago. Short term recommendation for the stock is Neutral.

Q3 earnings are to be reported on 17th of November

Baba Stock Forecast: Latest Price

Share Volume26.7 M
Forward P/E 1 Year14.35

Alibaba Stock Forecasts – Latest News

China may relax restrictions: Alibaba stock has seen highs and lows due to news on Chinese policies. Recently, the stock price went up after reports stated that China is expected to relax covid-related policies. Previously, when President Xi Jingping started his third term in October, the stocks fell due to the fear of further tightening the covid restrictions, but that was reversed when the People’s Bank of China commented that it would study new policies to improve the country by helping business sectors, county’s domestic markets, etc. Now the stocks are up due to the recent reports.

Baba Stock Forecast: Latest Tweet

Baba Stock Forecast: Momentum Summary

Momentum IndicatorIndicator Direction
PriceLower
TechnicalNeutral
Google Search Trend Declining
VolumeHigher
Performance vs NASDAQLower

Also read: NAKD Stock Forecast

Also read: DWAC stock Forecast

Baba Stock Forecast: Technical Analysis

SourceSupportResistanceRecommendation
Investing$92 (S3)$93 (R1)Buy
BarChart$87 (S3)$95 (R1)Sell

Baba Stock Forecast: CrowdWisdom360-Insights

  • The selloff in Chinese stocks, particularly those listed in the United States, has accelerated in the previous week. Alibaba, JD.com, and other companies’ advances on Wednesday mostly reversed recent losses.The Chinese government stated that it has kept in close contact with US regulators and is working on a cooperative strategy. But still, the possibility of Chinese stocks being delisted in the United States due to a lack of accounting transparency has been a key headwind for the country’s largely foreign-listed tech sector.
  • Alibaba is almost back to where it was when it went public.
  • The growth of Alibaba has slowed. In fiscal years 2020 and 2021, revenue increased by 35% and 41%, respectively. However, analysts predict that fiscal 2022 would see only 20% growth and fiscal 2023 will see 15% growth.
  • Russia has been Alibaba’s largest market since 2013. Ukraine, too, has been a fast growing market for Alibaba’s retail service AliExpress. The aggravating situation between Ukraine and Russia can put Alibaba in a tight spot. Alibaba has so far remained silent regarding the matter, and their sole focus seems to be expanding their markets and services.
  • Alibaba’s insiders have revealed that they have increased their share buyback from $15 Billion to $25 Billion. This current plan will be valid until March 2024.
  • Investment firm- Fisher Asset Management is the dominant shareholder of Hedge Funds. They hold 14 million shares that are worth $2 Billion, as tracked by Insider Monkey.
  • Alibaba has invested $60 Million in Nreal- an Augmented Reality company. Like other Chinese firms, Alibaba’s interest in the Metaverse is no surprise.
  • The fear of Chinese stocks being delisted has remained on the surface for quite a while. Recently, an audit proposal by China states that- US Auditors will be given full access to more than 200 Chinese companies. US auditors were not permitted to view Chinese companies’ information, which led to a possible delisting threat for Chinese stocks. Hopefully, this development may ease the current circumstances.
  • The Chinese government has put a ban on minor users from sending any virtual gift items on Livestream platforms. Moreover, the feeds of minors will not show any livestreams after 10 PM. Companies like Alibaba and TikTok may face the repercussions.
  • Slow Growth rate and declining margins crushed the stock. Current short-term recommendation is to sell this stock.

BABA Stock Forecast: Latest Video

YouTube video

Baba Stock Forecast: Google Trends

In the last 2-3 days BABA has seen a steady decline in volume trend.

BABA Stock Forecast: Price target

 Overall Average$130.8
Truist Financial$125
Morgan Stanley$90
Barclays$114
Deutsche Bank$160
 Bank of America$155
HSBC$141

Baba Stock Forecast: News and Developments

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 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 digital commerce unit will manage 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 from April. Wu has helped to lead three Alibaba related company’s public listings and will continue to be on executive director board for Alibaba.

Government Push for Growth After Months-Long Crackdown

  • Alibaba showed signs of recovery in 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 last one month.
  • China’s central bank announced on Monday (6.12.2021) that it plans to reduce most banks reserve requirement next week and as a results plans to pump 1.2 trillion yuan ($188 billion) of liquidity in the market. This step is a sign 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 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 influx of competitors in the sector. Alibaba is seeing growth deaccelerating in customer management revenue (CMR) which grew at just 3% in 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 an average, merchants spend 1871 minutes on average in October on Douyin and only 350 minutes on Taobao- live streaming platform of Alibaba Group.
  • Other competitor – Pinduoduo is popular in rural market due to rock bottom pricing and group buying model encouraging purchases to be shared on messaging platform 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 in e-commerce offerings, and smaller startups are targeting segments like footwear and makeup.
  • Alibaba has also been hurt by 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 the 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 exponential growth trajectory much like what is expected from newbies like Douyin. Also, it is well understood that market will be shared among all the incomers and Alibaba is no exception to that.
  • Didi Global Inc 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 abundance of negative news, but Alibaba is holding the rope to battle it out and rise in difficult times by taking measures like appointing 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 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.

Subhash

Subhash

Subhash, Founder of Crowdwisdom360 is an MBA and a Trained Financial Advisor with an extensive background in Forecasting in Financial Services and Politics. He has appeared many times on National TV and has written for a variety of magazines on Wealth Management and Election Strategy.