Alibaba Forecast (Abang's Opinion)
Reasons to invest in $Alibaba(BABA.US$:
1. There is a lot of Growth potential in this company. {Alibaba Challenges Amazon with a Promise}
1. There is a lot of Growth potential in this company. {Alibaba Challenges Amazon with a Promise}
2. Coupling with Growth potential, Alibaba is undervalued. Do look out for thr P/E ratio to fall under 20. Currently valued at 22.
3. Extremely Strong Fundamentals:
a. Profit Margin: 21%
b. Current Assets > Total Liabilities (Current + Non-current)
c. Strong Growth: 35%-50% revenue increase over the last 4 years, 18% - 35% profit growth.
d. Free Cash Flow: $15 Billion on average.
***Note: Current FCF has decreased a lot over thr last few weeks due to Chinese Tech crackdown. However, i believe it will rise back again. If Alibaba can pull from - 5.9B in Mar 2020 (due to COVID) to 20.5B in Dec 2020 (9 months), there will be a comeback.
a. Profit Margin: 21%
b. Current Assets > Total Liabilities (Current + Non-current)
c. Strong Growth: 35%-50% revenue increase over the last 4 years, 18% - 35% profit growth.
d. Free Cash Flow: $15 Billion on average.
***Note: Current FCF has decreased a lot over thr last few weeks due to Chinese Tech crackdown. However, i believe it will rise back again. If Alibaba can pull from - 5.9B in Mar 2020 (due to COVID) to 20.5B in Dec 2020 (9 months), there will be a comeback.
On a conservatist basis, I would expect the price to at least be between 230-270, even at a P/E of 15. Currently trading at $185.
Note: 3rd Aug will be when the earning of BABA is out. Do keep an eye out. 👀
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