Amazon has made a name for itself in the U.S. as the go-to online retailer for almost anything you can think of. Well, Alibaba is China’s Amazon, but how does Alibaba stock rate?
Alibaba Group Holdings Ltd. (NYSE: BABA) is a Chinese multinational technology company that specializes in e-commerce, retail, internet and technology.
Founded by Jack Ma in 1999, the company has enjoyed remarkable success and is now one of the world’s leading companies.
Let’s look at what makes BABA tick and what the future holds for this international powerhouse by looking at Alibaba stock within our Stock Power Ratings system.
Alibaba’s Core Businesses
Alibaba operates several different core businesses that span the globe.
These include:
- Tmall (the B2C platform).
- Taobao (the C2C platform).
- AliExpress (the global marketplace).
- And Lazada (the Southeast Asian regional e-commerce platform).
Together, these four core businesses make up Alibaba’s primary revenue stream.
Alibaba also offers cloud computing services through its subsidiary AliCloud, which provides cloud storage and other cloud computing services to businesses around the world.
Alibaba has a number of other investments in various companies, including Ant Financial Services Group (formerly Alipay) and UC Web.
The Outlook for 2023
Alibaba’s outlook for 2023 is quite promising as it continues to expand globally.
The company is expected to benefit from increased consumer spending due to China’s burgeoning middle class as well as growing demand from overseas markets in Southeast Asia, India, Europe and North America.
As such, it is expected that Alibaba will continue to be an integral part of the global economy well into 2023 and beyond.
The company has also been investing heavily in artificial intelligence and machine learning technologies in order to improve its services as well as develop innovative new products and features for customers around the world.
This investment should help ensure that Alibaba remains on top of its game for many years to come.
But one look at BABA’s ratings tells a different story…
Alibaba Stock Power Ratings
Alibaba stock rates a “Bearish” 23 out of 100. That means our system expects the stock to underperform the broader market over the next 12 months!
BABA’s Stock Power Ratings in January 2023.
Alibaba is a massive company. Its market capitalization (outstanding shares times current share price) sits at $310 billion as I write. That’s why BABA scores a 0 out of 100 on our size factor ratings.
When looking at two companies with similar ratings on the other five factors, the one with a higher size rating (aka a smaller company) should outperform its larger counterpart.
That’s because it takes less capital from investors to move the needle. A $100,000 investment into a company worth $1 million is going to shoot that share price much higher than a company that’s worth $100 million.
It also rates poorly on value (24) and growth (37).
While the stock enjoyed a nice run post-COVID. Shares are now overvalued compared to its financials. And growth has slowed down amid recession fears and higher interest rates.
Bottom line: Alibaba looks set to remain a major player in the global economy for many years to come thanks to its wide array of products and services as well as its aggressive investments into new technologies.
But our Stock Power Ratings system says to avoid Alibaba stock for now.