Alibaba Group (NYSE:BABA) Trading Up 1.2% - Still a Buy?

Key Points

• Alibaba shares rose 1.2% to about $108.55, but remain below their 50-day and 200-day moving averages of $118.03 and $122.41, respectively.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and average price target of $187.45, despite mixed individual target changes.
• Recent earnings showed an EPS miss ($1.26 versus $1.94 expected), while revenue increased 8.6% year over year to $39.64 billion. Investors see potential upside from a valuation discount tied to elevated capital spending, and insiders—including the CEO and chairman—recently bought shares.

Alibaba Group Holding Limited (NYSE:BABA - Get Free Report) shares rose 1.2% on Thursday . The company traded as high as $109.14 and last traded at $108.5530. Approximately 8,100,156 shares changed hands during mid-day trading, a decline of 32% from the average daily volume of 11,862,076 shares. The stock had previously closed at $107.27.

Alibaba Group News Summary

Here are the key news stories impacting Alibaba Group this week:

• Neutral Sentiment: An investor letter argued that Alibaba’s elevated short-term capital expenditures are pressuring free cash flow but have created an estimated 30% valuation discount, suggesting potential long-term upside if spending produces stronger growth. Alibaba’s Short-Term Capex Drag Creates a 30% Valuation Discount
• Neutral Sentiment: Taobao, Alibaba’s e-commerce platform, promoted an exhibition focused on unconventional toys and plush products. The event may support consumer engagement but has limited direct impact on near-term earnings. Taobao Bets Big on ‘Ugly Goods’

Analyst Upgrades and Downgrades

Several equities research analysts have recently issued reports on BABA shares. Wall Street Zen raised shares of Alibaba Group from a "sell" rating to a "hold" rating in a research note on Saturday, May 23rd. Barclays lifted their price target on Alibaba Group from $195.00 to $200.00 and gave the company an "overweight" rating in a research note on Friday, August 21st. HSBC set a $170.00 price target on Alibaba Group in a report on Thursday, July 9th. Benchmark reissued a "buy" rating on shares of Alibaba Group in a report on Thursday, August 20th. Finally, Robert W. Baird dropped their price objective on Alibaba Group from $164.00 to $160.00 and set an "outperform" rating on the stock in a report on Friday, August 21st. Two research analysts have rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and five have given a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $187.45.

Alibaba Group Trading Up 1.2%

The company's fifty day simple moving average is $118.03 and its 200-day simple moving average is $122.41. The firm has a market capitalization of $269.82 billion, a PE ratio of 26.28, a P/E/G ratio of 1.44 and a beta of 0.51. The company has a debt-to-equity ratio of 0.21, a current ratio of 1.36 and a quick ratio of 1.36.

Alibaba Group (NYSE:BABA - Get Free Report) last released its earnings results on Friday, August 14th. The specialty retailer reported $1.26 EPS for the quarter, missing analysts' consensus estimates of $1.94 by ($0.68). Alibaba Group had a return on equity of 4.79% and a net margin of 7.00%.The company had revenue of $39.64 billion for the quarter, compared to analysts' expectations of $39.52 billion. During the same period in the prior year, the firm earned $14.75 EPS. The firm's revenue for the quarter was up 8.6% on a year-over-year basis. As a group, sell-side analysts expect that Alibaba Group Holding Limited will post 5.91 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, Director Joseph Tsai acquired 720,000 shares of the business's stock in a transaction on Monday, August 24th. The stock was bought at an average cost of $14.29 per share, for a total transaction of $10,288,800.00. Following the purchase, the director owned 114,979,168 shares in the company, valued at approximately $1,643,052,310.72. This represents a 0.63% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, CEO Yongming Wu bought 350,000 shares of Alibaba Group stock in a transaction on Monday, August 24th. The shares were purchased at an average cost of $14.24 per share, with a total value of $4,984,000.00. Following the acquisition, the chief executive officer directly owned 1,364,418 shares of the company's stock, valued at approximately $19,429,312.32. The trade was a 34.50% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders sold a total of 920,303 shares of company stock worth $70,796,370 in the last quarter. 12.50% of the stock is owned by insiders.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the company. IPG Investment Advisors LLC lifted its holdings in Alibaba Group by 97.8% in the 2nd quarter. IPG Investment Advisors LLC now owns 17,019 shares of the specialty retailer's stock valued at $1,647,000 after purchasing an additional 8,415 shares in the last quarter. WINTON GROUP Ltd acquired a new stake in Alibaba Group during the 2nd quarter worth $1,008,000. NorthRock Partners LLC grew its holdings in shares of Alibaba Group by 9.9% during the second quarter. NorthRock Partners LLC now owns 3,109 shares of the specialty retailer's stock worth $298,000 after buying an additional 280 shares in the last quarter. NewEdge Advisors LLC grew its holdings in shares of Alibaba Group by 35.2% during the second quarter. NewEdge Advisors LLC now owns 221,809 shares of the specialty retailer's stock worth $21,289,000 after buying an additional 57,725 shares in the last quarter. Finally, Baird Financial Group Inc. raised its position in shares of Alibaba Group by 6.7% in the second quarter. Baird Financial Group Inc. now owns 754,749 shares of the specialty retailer's stock valued at $72,441,000 after buying an additional 47,358 shares during the last quarter. 13.47% of the stock is owned by institutional investors and hedge funds.

Alibaba Group Company Profile

Alibaba Group Holding Limited is a global technology and commerce company founded in 1999 by Jack Ma and a group of co-founders. Headquartered in Hangzhou, China, the company operates a broad ecosystem of businesses serving consumers, merchants, brands and enterprises.

Its core businesses include online and mobile commerce platforms such as Taobao and Tmall in China, as well as international marketplaces including AliExpress and Lazada. Alibaba also provides wholesale commerce, cross-border retail, logistics through Cainiao, local consumer services, digital media and entertainment, and other consumer-focused technology services.

Alibaba Cloud provides cloud computing, data storage, artificial intelligence and related technology solutions to businesses and organizations.

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