Alibaba Group (NYSE:BABA) Stock Falls 1.5% - Should You Sell?

Key Points

• Alibaba shares fell 1.5% to about $99.46, trading below both their 50-day and 200-day moving averages, with volume also below average.
• Analysts remain broadly positive, with a consensus rating of “Moderate Buy” and an average price target of $182.89; several firms recently raised their targets, though Robert W. Baird lowered its target to $160.
• Alibaba’s latest quarterly revenue rose 8.6% year over year to $39.64 billion and slightly exceeded estimates, but EPS of $1.26 missed the $1.94 consensus. Insiders sold nearly 1 million shares over the past 90 days, including sales by the CFO and another insider.

Alibaba Group Holding Limited (NYSE:BABA - Get Free Report)'s stock price fell 1.5% on Thursday. The company traded as low as $98.80 and last traded at $99.4550. Approximately 6,731,025 shares traded hands during mid-day trading, a decline of 41% from the average daily volume of 11,402,097 shares. The stock had previously closed at $100.96.

Analyst Ratings Changes

A number of research firms recently weighed in on BABA. Barclays upped their price target on Alibaba Group from $195.00 to $200.00 and gave the stock an "overweight" rating in a report on Friday, August 21st. Susquehanna upped their target price on Alibaba Group from $185.00 to $190.00 and gave the company a "positive" rating in a research note on Friday, August 28th. Weiss Ratings raised shares of Alibaba Group from a "hold (c-)" rating to a "hold (c)" rating in a research note on Friday, October 2nd. Robert W. Baird cut their price target on shares of Alibaba Group from $164.00 to $160.00 and set an "outperform" rating on the stock in a report on Friday, August 21st. Finally, Sanford C. Bernstein restated an "outperform" rating and set a $165.00 price objective on shares of Alibaba Group in a research note on Monday, September 7th. Two research analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and six have assigned a Hold rating to the company's stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus price target of $182.89.

Alibaba Group Trading Down 1.5%

The firm has a 50-day moving average of $110.89 and a 200 day moving average of $127.20. The stock has a market capitalization of $247.42 billion, a price-to-earnings ratio of 24.08, a PEG ratio of 1.30 and a beta of 0.47. The company has a current ratio of 1.36, a quick ratio of 1.36 and a debt-to-equity ratio of 0.21.

Alibaba Group (NYSE:BABA - Get Free Report) last issued its quarterly earnings results on Friday, August 14th. The specialty retailer reported $1.26 EPS for the quarter, missing the consensus estimate of $1.94 by ($0.68). Alibaba Group had a return on equity of 4.79% and a net margin of 7.00%. The business had revenue of $39.64 billion during the quarter, compared to the consensus estimate of $39.52 billion. During the same quarter last year, the firm posted $14.75 earnings per share. Alibaba Group's revenue was up 8.6% compared to the same quarter last year. As a group, equities analysts predict that Alibaba Group Holding Limited will post 5.76 EPS for the current fiscal year.

Insiders Place Their Bets

In related news, CFO Hong Xu sold 103,046 shares of the company's stock in a transaction on Friday, September 25th. The shares were sold at an average price of $13.68, for a total transaction of $1,409,669.28. Following the completion of the sale, the chief financial officer directly owned 406,450 shares of the company's stock, valued at approximately $5,560,236. This represents a 20.23% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Fang Jiang sold 885,272 shares of the firm's stock in a transaction that occurred on Wednesday, September 30th. The shares were sold at an average price of $13.55, for a total value of $11,995,435.60. Following the completion of the sale, the insider directly owned 4,679,097 shares in the company, valued at $63,401,764.35. This trade represents a 15.91% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 999,971 shares of company stock worth $13,563,304 in the last 90 days. 12.50% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Alibaba Group

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Trek Financial LLC increased its stake in shares of Alibaba Group by 12.8% in the 3rd quarter. Trek Financial LLC now owns 94,364 shares of the specialty retailer's stock valued at $10,148,000 after acquiring an additional 10,713 shares in the last quarter. Bank Julius Baer & Co. Ltd Zurich boosted its holdings in Alibaba Group by 4.3% during the third quarter. Bank Julius Baer & Co. Ltd Zurich now owns 29,045 shares of the specialty retailer's stock worth $3,124,000 after purchasing an additional 1,200 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. bought a new stake in Alibaba Group during the third quarter worth $12,327,000. Vise Technologies Inc. grew its stake in Alibaba Group by 19.2% in the 3rd quarter. Vise Technologies Inc. now owns 94,041 shares of the specialty retailer's stock valued at $10,113,000 after purchasing an additional 15,154 shares during the period. Finally, Summit Global Investments purchased a new stake in shares of Alibaba Group during the 3rd quarter worth approximately $379,000. Institutional investors and hedge funds own 13.47% of the company's stock.

Alibaba Group Company Profile

Alibaba Group Holding Limited is a technology and commerce company founded in 1999 and headquartered in Hangzhou, China. It operates a broad digital ecosystem that connects consumers, merchants, brands and businesses through online marketplaces, technology platforms and related services.

The company's China commerce businesses include Taobao, a consumer-focused marketplace, and Tmall, which enables brands and retailers to sell directly to consumers. Alibaba also operates 1688, a business-to-business wholesale marketplace.

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