The American Depositary Share (ADS) of Chinese technology giant Alibaba has more than doubled from its 52-week low of $58.01. The recent surge in Alibaba Stock NYSE can be attributed to a number of factors, including the easing of regulatory headwinds in China. Guo Shuqing, the Chairman of China’s Banking and Insurance Regulatory Commission, recently signaled that Beijing’s crackdown on tech giants is over, which has helped boost Chinese stocks, including Alibaba (BABA:NYE).
In addition to regulatory relief, investors are also optimistic about the rebound in consumption in China and the potential for improving margins at the company. Citigroup analyst Alicia Yap expects a faster-than-expected recovery in China’s consumption story, which she believes will drive Alibaba stock NYSE higher. Yap has raised her price target on the stock to $160 from $144.
Barclays analyst Jiong Shao also believes that Alibaba will benefit from the growth in its gross merchandise volume in the March quarter, and expects the company’s December quarter margins to improve.
Alibaba has also been focused on improving its operating performance through cost optimization, which has been paying off. During the company’s last conference call, Alibaba reported that its adjusted EBITA margin expanded by 3%, which is a positive sign. The company is also optimizing its capital resources and prioritizing growing businesses that align with its long-term revenue growth and profitability profile. However, the uncertain global macro environment could pose challenges for Alibaba going forward.
Is Alibaba a good stock to buy or hold?
According to analysts at Stock Target Advisor, the consensus is that BABA stock is a “Strong Buy.” The stock has received 16 unanimous “Buy” recommendations, and the average price target of $138.53 implies a potential upside of 18.42%.