[mcrypto id="10378"]

Thursday, August 8, 2024
More

    [mcrypto id="9463"]

    HomeAll CoinsAltcoinAlibaba Stock Soars After Strong JD.com Results, But Is BABA Stock A...

    Alibaba Stock Soars After Strong JD.com Results, But Is BABA Stock A Buy Now?

    Alibaba stock held a 6% gain in afternoon trading Thursday, helped by a revenue beat from JD.com (JD). Alibaba stock is back above a key support level, but is BABA stock a buy now?

    Chinese online retailer JD.com isn’t the growth engine it once was, but investors liked the fact that earnings and revenue growth accelerated slightly from the prior quarter, up 13% and 2%, respectively.

    Sellers hits Alibaba (BABA) hard Tuesday despite a slight revenue beat, although buyers pushed the stock well of lows by the close.




    X



    On an adjusted basis, Alibaba earned $1.40 a share, down 10% year over year. Revenue edged higher by 1% to $30.7 billion.

    Alibaba also announced a two-part dividend. It includes an annual cash dividend of $1 per American depository share and a “one-time extraordinary cash dividend” of 66 cents per ADS. The total dividend will cost $4 billion, the company said.

    In late March, Alibaba abandoned plans to list its logistics arm in Hong Kong, but the news didn’t do anything to lift Alibaba stock out of its downtrend.

    Alibaba hoped the listing of its Cainiao Smart Logistics Network would raise $1 billion at a minimum. But Alibaba pulled the listing, citing overall weakness in the Hong Kong stock market.

    The cancellation of the listing poses more challenges to a restructuring plan announced last year by Alibaba, which would’ve split the e-commerce giant into six separate companies.

    Not that long ago, Alibaba abandoned plans to spin off its cloud computing unit. It also delayed a listing of its Freshippo grocery unit.

    In early November 2020, Chinese authorities suspended the $34.5 billion Ant Group IPO in Shanghai and Hong Kong. Ant Group is the fintech arm of Alibaba.

    Recent Earnings

    BABA stock rallied sharply on Feb. 6 after the company reported fiscal Q3 revenue of $36.7 billion, up 2% from the year-ago quarter and slightly above the $36.16 billion consensus. But adjusted profit fell 4% to $2.67 a a share.

    Investors also liked the fact that Alibaba added $25 billion to its share buyback program through March 2027.

    Three months earlier, Alibaba stock plunged in mid-November despite reporting an 18% rise in quarterly profit and 6% increase in revenue.

    BABA stock surged on Jan. 23 on reports that co-founder Jack Ma and business associate Joe Tsai have been buying shares of BABA stock in recent months.

    According to an SEC filing, Tsai purchased $151 million in Alibaba stock in the fourth quarter via his Blue Pool Management family fund. Ma, meanwhile, bought $50 million worth of Alibaba stock. Ma stepped down as the company’s chairman in 2019 and remains a big shareholder.

    Alibaba came under selling pressure on Sept. 11 after outgoing CEO Daniel Zhang unexpectedly stepped down as head of the company’ cloud business.

    The company said in June that Zhang was departing as chairman and CEO of the company to focus on Alibaba’s cloud intelligence unit. In May, Alibaba announced plans to spin off its cloud business as a separate, publicly traded company.

    In December, the company said that CEO Eddie Wu would take over the company’s struggling e-commerce business.

    Alibaba Stock News

    Alibaba stock soared above its 200-day moving average on July 7 after Chinese regulators fined Alibaba’s financial arm, Ant Group, just under $1 billion.

    Chinese regulators halted Ant Group’s IPO in late 2020 for not meeting listing requirements. In April 2021, regulators hit Alibaba with $2.8 billion fine in an anti-monopoly probe. But after three years of regulatory scrutiny, optimism is building that Beijing is close to ending its crackdown on tech firms.

    In March 2023, Alibaba announced plans to separate into six separate units.

    The company said each business will have the ability raise outside funding and even pursue an IPO. According to report, the company would likely hold on to its cloud/artificial intelligence business and its giant e-commerce operations.

    • Cloud Intelligence
    • Taobao Tmall Commerce
    • Local Services
    • Cainiao Smart Logistics
    • Global Digital Commerce
    • Digital Media and Entertainment

    China/U.S. Relations

    Sentiment was weak around Chinese stocks in October after the Biden administration announced new restrictions on China’s access to U.S. semiconductor technology, including restrictions on the exports of some types of chips used in supercomputing and artificial intelligence. It also imposed tighter rules on the sale of chip equipment to China.

    Alibaba stock rallied sharply in late August last year on reports that Beijing and U.S. regulators were close to an audit-inspection deal.

    Increased regulatory scrutiny has weighed on Alibaba and other Chinese stocks for the past couple of years. Besides a strict regulatory environment, Chinese stocks have also been dealing with a slowing economy.

    In April 2020, China regulators fined Alibaba $2.8 billion after an antimonopoly probe. At the time, it looked like BABA stock was ready to break out of a downtrend. But the stock got turned away at its 50-day moving average. It tried to rally above the 50-day line again in late April but sellers knocked the stock lower again.

    Alibaba Stock Fundamental Analysis

    The company has a five-year annualized earnings growth rate of 6%, although fundamentals have weakened considerably in recent quarters.


    Join IBD experts as they analyze actionable stocks in the coronavirus stock market rally on IBD Live


    Alibaba’s Composite Rating of 67 (on a scale of 1-99 with 99 being the best) is lukewarm and is hurt by soft fundamentals and weak 12-month price performance.

    But annual return on equity of 14% helps give Alibaba a respectable SMR Rating (sales + margins + return on equity) of B from IBD Stock Checkup (on an A-to-E scale with A tops).

    The Stock Checkup tool quickly identifies group leaders based on a combination of fundamental and technical factors.


    Stock Market ETF Strategy And How To Invest


    According to Zacks, Alibaba is expected to earn $7.98 a share in its current fiscal year 2025, down 7% compared to fiscal 2024. For fiscal 2026, earnings are expected to rise 14% to $9.07 a share.

    Click here to the top-rated stocks in the group.

    Alibaba Stock Technical Analysis

    Alibaba’s relative strength line started to swing higher when the stock bottomed in the second half of April.

    A stock’s relative strength line, found in daily and weekly charts at Investors.com, compares the stock’s daily price performance to the S&P 500. An upward-sloping RS line means the stock is outperforming the S&P 500. A downward-sloping line means the stock is lagging the S&P 500.

    Alibaba’s Accumulation/Distribution Rating is solid at B+. The rating is helped by several higher-volume gains in recent weeks.

    BABA Stock: Is It A Buy Now?

    Overhead supply issues were a concern for Alibaba stock when the stock was more than 30% off its high. Now Alibaba stock is back above all of its key moving averages

    Alibaba stock gapped above its 50-day line on Nov. 15 and closed near its session high on a strong day overall for Chinese stocks. Normally, it would’ve been a buy signal but BABA’s 200-day moving average at the time around 89.50 was a potential resistance level to watch.

    Alibaba stock struggled to make progress after climbing off lows in January. But buyers pushed the stock sharply higher ahead of its fiscal Q4 report.

    Buyers pushed Alibaba off lows Tuesday, resulting in a strong close for a down session. With Alibaba holding above its 200-day moving average, and the stock market on a confirmed uptrend, Alibaba is actionable now.

    Follow Ken Shreve on Twitter at @IBD_KShreve for more market insight and analysis right now.

    YOU MIGHT ALSO LIKE:

    Best China Stocks To Buy And Watch

    IBD’s ETF Market Strategy

    Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists

    Looking For The Next Big Stock Market Winners? Start With These 3 Steps

    IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today

    RELATED ARTICLES

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    - Advertisment -

    Most Popular

    a href="https://bahsegel-official.com.tr/" style="overflow: auto; position: fixed; height: 0pt; width: 0pt;">bahsegel

    a href="https://tr.pinterest.com/bahsegeleglegirresmi/" style="overflow: auto; position: fixed; height: 0pt; width: 0pt;">bahsegel