Alibaba Group Holding Ltd. (NYSE:BABA): Alibaba shares are receiving support from its expansion strategies. The stock could hit $300 this year, according to big Wall Street names.
Although its share price is up 129% in the last three years, the stock price performance remains sluggish since the start of this year. Alibaba shares are up only 8% in the previous seven months – whereas its financial numbers accelerated at almost 50% Y/Y. The lower-than-expected share price performance combined with a robust outlook for the following quarters makes Alibaba shares undervalued, according to analysts.
Wall Street Price Target for Alibaba Shares is $300
Wall Street analysts are showing confidence in future fundamentals of the specialty retailer; Raymond James has issued a ‘Buy’ rating for Alibaba shares with the price target of $300.
Susquehanna has also increased its price target for Alibaba shares from $220 to $305, citing the expansion of its market share in the Chinese e-commerce market. Susquehanna analyst Shyam Patil believes that “significant new user additions in F2018 should provide a tailwind to growth through F2019.”
MKM Partners analyst Rob Sanderson says, “The potential for higher earnings growth and long-term opportunity is enhancing trader’s sentiments on Alibaba shares.”
Alibaba Fundamentals Support Analysts Claims
Alibaba generated a year-over-year revenue growth of 58% to $40 billion in fiscal 2018, and its earnings grew 40% since last year. On top of that, the company expects a revenue growth of 61% in fiscal 2019 – which would take its revenues to $63 billion compared to the consensus estimate of $54 billion.
>> Apple and Samsung End Patent War: 7 Years of Tension Resolved
The substantial revenue growth from Alibaba is due to its core commerce business and the continued investments it had made in longer-term growth opportunities. It has also doubled its investments in cloud computing, technology development, digital entertainment, logistics, and local services to capture the market opportunities in China and the rest of world.
Daniel Zhang, Chief Executive Officer of Alibaba Group, says, “With the continuing roll-out of our New Retail strategy, our e-commerce platform is developing into the leading retail infrastructure of China.”
Featured Image: twitter
