Alibaba Group Holding Limited (BABA) is a Chinese multinational conglomerate holding company specializing in e-commerce, retail, Internet, and technology. Alibaba has been one of the most popular investments for the last decade, and its stock has generated significant returns for investors who purchased the shares during the initial public offering (IPO).
Here, a comprehensive analysis article of Alibaba:
- let’s take a look at some key figures for Alibaba as of March 15, 2023:
The stock’s previous close was $82.90, and its open was $82.86. T
he bid-ask spread was $84.08 x 1,300 – $84.15 x 1,100, and the day’s range was $82.16 – $83.91.
The 52-week range was $58.01 – $125.84, and the volume was 17,590,405. The average volume was 20,940,186, and the market capitalization was $216.962 billion. The beta (5Y Monthly) was 0.63, and the P/E ratio (TTM) was 49.62.
The EPS (TTM) was 1.69, and the earnings date was May 24, 2023 – May 29, 2023. - let’s examine Alibaba’s financial statements:
According to the company’s most recent earnings report, its total revenue for the trailing twelve months (TTM) ending March 30, 2022, was CNY 864.539 billion.
This is an increase from the previous year’s TTM revenue of CNY 853.062 billion.
The cost of revenue for the TTM was CNY 549.817 billion, resulting in a gross profit of CNY 314.722 billion.
The operating expense for the TTM was CNY 210.180 billion, resulting in an operating income of CNY 104.542 billion.
The net non-operating interest income expense for the TTM was CNY -63.646 billion, and the other income expense was CNY 3.421 billion.The pretax income for the TTM was CNY 44.317 billion, and the tax provision was CNY 13.870 billion.
The net income available to common stockholders for the TTM was CNY 32.752 billion, resulting in a diluted EPS of CNY 1.82. - let’s analyze Alibaba’s P/E ratio, EPS, and ROE:
The P/E ratio for Alibaba (TTM) is 49.62, which indicates that the company’s stock price is expensive compared to its earnings per share.
The EPS for Alibaba (TTM) is 1.69, which means that the company’s net income is not very high compared to the number of outstanding shares.
Alibaba’s ROE for the TTM was 7.44%, which is a relatively low number, indicating that the company is not generating much profit from shareholders’ equity. - Conclusion
Investing in Alibaba has its advantages and disadvantages.
One of the biggest advantages of investing in Alibaba is the company’s potential for growth, given its size, scale, and presence in the Chinese e-commerce market. Alibaba is also expanding its business globally, which could increase its revenue and profitability.
However, there are also several risks associated with investing in Alibaba, including regulatory and legal risks, geopolitical risks, and competition from other e-commerce players.
The Chinese government has recently increased its scrutiny of large technology companies, including Alibaba, which could result in more regulatory challenges and increased costs.
Additionally, Alibaba is facing fierce competition
References:
[1] Yahoo.com
[2] Nasdaq.com