UBS Securities cuts Alibaba Group Holding Limited(BABA:NYE) to $140 from $150

STA Research
by: STA Research

Analysts rate Alibaba Group Holding Limited stock with a consensus Strong Buy rating and a 12-month average target price of $190.65 per share

Today UBS Securities maintains Alibaba Group with a Buy rating, and lowers the target price to $140 from $150.

Yesterday Goldman Sachs reinitiated Alibaba Group Holding Limited with a Buy rating and set the target price at $185.

Based on the Alibaba Group Holding Limited stock forecasts from 21 analysts, the average analyst target price for Alibaba Group Holding Limited is USD 190.65 over the next 12 months. Alibaba Group Holding Limited’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Alibaba Group Holding Limited is Bullish, which is based on 8 positive signals and 3 negative signals. At the last closing, Alibaba Group Holding Limited’s stock price was USD 103.53. Alibaba Group Holding Limited’s stock price has changed by -6.67% over the past week, +10.61% over the past month and -53.64% over the last year.

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to merchants, brands, retailers, and other businesses to engage with their users and customers in the People’s Republic of China and internationally. It operates through four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. The company was incorporated in 1999 and is based in Hangzhou, the People’s Republic of China.

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Low volatility

Alibaba Group Holding Limited stock’s annual returns have been stable and consistent compared to its sector peers (for a hold period of at least 12 months) and are in the top quartile. Although stability is good, also keep in mind it can limit returns.

Underpriced compared to earnings

Alibaba Group Holding Limited stock is trading low compared to its peers on a price to earning basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior return on equity

The company management has delivered a better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets

Alibaba Group Holding Limited stock management has delivered a better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Underpriced on a free cash flow basis

Alibaba Group Holding Limited stock is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

What we don’t like:

Poor risk-adjusted returns

This company is delivering below median risk-adjusted returns to its peers. Even if it is outperforming on returns, the returns are unpredictable. Proceed with caution.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced on a cash flow basis

Alibaba Group Holding Limited stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

 

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