Alibaba Shares Have Never Been Cheaper And Analysts Can’t Cut Their Estimates Fast Enough

Alibaba Shares Have Never Been Cheaper And Analysts Can’t Cut Their Estimates Fast Enough
Andrew Rummer

over 2 years ago1 min

After a 53% tumble over the past year, Alibaba shares have never been this cheap relative to the company’s profits or revenue. 

As the chart above shows, Alibaba’s US-listed stock is currently priced at 18.7x reported profits and 2.6x times sales. Since its 2014 initial public offering (IPO), the ecommerce firm has traded for an average of 51x profits and 11x sales. 

Alibaba was previously Asia’s biggest public company, but a crackdown from China’s government on some of its highest flying tech firms has cut its value to just $330 billion, below the likes of Korea’s Samsung and Taiwan Semiconductor Manufacturing Co.

Despite the losses, Wall Street is still bullish on Alibaba. Of the 62 analysts tracked by Bloomberg, 56 have a buy rating and only one rates the stock a sell. And yet – as the chart below shows – they’ve been forced to cut their price targets for 18 straight weeks in an attempt to keep pace with the stock’s precipitous plunge.

Alibaba price targets

Perhaps beleaguered Alibaba shareholders – or those looking for a bargain – can find a glimmer of hope in the green circle, which shows the tiniest of tiny upticks in analysts’ price targets.



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