50% OFF
MarketBeat All Access
Get 30 days free. Save 50% your first year.
  •  days
  •  Hours
  •  Minutes
  •  Seconds
×
QQQ   279.94 (+1.99%)
AAPL   149.84 (-1.27%)
MSFT   241.07 (+1.97%)
META   141.61 (+5.36%)
GOOGL   100.05 (+2.62%)
AMZN   118.01 (+3.15%)
TSLA   287.81 (+1.72%)
NVDA   127.36 (+2.60%)
NIO   17.33 (+0.81%)
BABA   80.99 (+4.01%)
AMD   68.36 (+1.77%)
T   15.83 (+0.64%)
MU   51.00 (+0.83%)
CGC   3.04 (+6.29%)
F   12.18 (+2.27%)
GE   64.46 (-0.02%)
DIS   99.40 (+3.70%)
AMC   7.67 (+2.95%)
PYPL   91.12 (+6.26%)
PFE   44.43 (+0.77%)
NFLX   245.20 (+9.29%)
QQQ   279.94 (+1.99%)
AAPL   149.84 (-1.27%)
MSFT   241.07 (+1.97%)
META   141.61 (+5.36%)
GOOGL   100.05 (+2.62%)
AMZN   118.01 (+3.15%)
TSLA   287.81 (+1.72%)
NVDA   127.36 (+2.60%)
NIO   17.33 (+0.81%)
BABA   80.99 (+4.01%)
AMD   68.36 (+1.77%)
T   15.83 (+0.64%)
MU   51.00 (+0.83%)
CGC   3.04 (+6.29%)
F   12.18 (+2.27%)
GE   64.46 (-0.02%)
DIS   99.40 (+3.70%)
AMC   7.67 (+2.95%)
PYPL   91.12 (+6.26%)
PFE   44.43 (+0.77%)
NFLX   245.20 (+9.29%)
QQQ   279.94 (+1.99%)
AAPL   149.84 (-1.27%)
MSFT   241.07 (+1.97%)
META   141.61 (+5.36%)
GOOGL   100.05 (+2.62%)
AMZN   118.01 (+3.15%)
TSLA   287.81 (+1.72%)
NVDA   127.36 (+2.60%)
NIO   17.33 (+0.81%)
BABA   80.99 (+4.01%)
AMD   68.36 (+1.77%)
T   15.83 (+0.64%)
MU   51.00 (+0.83%)
CGC   3.04 (+6.29%)
F   12.18 (+2.27%)
GE   64.46 (-0.02%)
DIS   99.40 (+3.70%)
AMC   7.67 (+2.95%)
PYPL   91.12 (+6.26%)
PFE   44.43 (+0.77%)
NFLX   245.20 (+9.29%)
QQQ   279.94 (+1.99%)
AAPL   149.84 (-1.27%)
MSFT   241.07 (+1.97%)
META   141.61 (+5.36%)
GOOGL   100.05 (+2.62%)
AMZN   118.01 (+3.15%)
TSLA   287.81 (+1.72%)
NVDA   127.36 (+2.60%)
NIO   17.33 (+0.81%)
BABA   80.99 (+4.01%)
AMD   68.36 (+1.77%)
T   15.83 (+0.64%)
MU   51.00 (+0.83%)
CGC   3.04 (+6.29%)
F   12.18 (+2.27%)
GE   64.46 (-0.02%)
DIS   99.40 (+3.70%)
AMC   7.67 (+2.95%)
PYPL   91.12 (+6.26%)
PFE   44.43 (+0.77%)
NFLX   245.20 (+9.29%)

Alibaba Group: A Huge Revenue Rebound Is Approaching

Alibaba Group: A Huge Revenue Rebound Is Approaching

Shares of Alibaba Group (NYSE: BABA) have been sold off recently following fines from Chinese regulators for disclosure violations. After the fines were issued, Alibaba's shares dropped by 15%. The company's performance YTD is -12.26%, but some investors believe that the stock could end up rebounding to new heights, driven by newly announced stimulus packages and the release of pent-up demand following the easing of lockdowns in China's major cities. The thesis is that China's consumer spending recovery will mirror the United States' rebound after stimulus measures were introduced and lockdowns ended. 

Shanghai, one of China's most important economic hubs, ended its lockdown on June 1. Beijing has been lockdown-free since May, but China's second and third-tier cities face continued disruptions. It's estimated that 41 cities in China are currently in full or partial lockdown, accounting for 22.8% of the country's GDP, aggravating a greater problem. China's economy has contracted sharply under lockdowns as GDP growth slowed to 0.4% in the second quarter. It's theorized these economic disruptions of COVID, along with its property crisis and recent mortgage boycotts, could sway Chinese authorities to adopt more measures of what's being termed "dynamic zero COVID," which gives local governments greater discretion in exercising measures to control the spread of the virus. At some point, the cost of a flat-lining economy and the rare appearance of civil disorder in the country could outweigh the benefit of keeping cities locked down to reduce case numbers, and that point may have been reached already.

An emergency teleconference was held on May 25 with 100,000 party members to discuss economic stimulus measures. The result of that discussion was a document outlining 33 policies the government will implement to get the economy back on its feet again. The policies included support for companies affected by the virus and strengthening the supply chain for basic necessities and resources. China's State Council also discussed more specific measures to boost domestic consumption in the face of COVID, which ties into the country's long-term vision and policies. China is far behind its GDP target of 5.5% this year, and its "Dual Circulation" strategy and "Common Prosperity" initiative depend on maintaining high levels of domestic consumption, which is apparently impossible under lockdowns.

The government's sharp pivot back towards its economic philosophies and a softening stance toward COVID is a very bullish sign for Alibaba, as it serves as a key conduit to China's internal consumption of products, with domestic sales making up 69% of its $134.56BN total revenue. In short, it seems that luck for Alibaba is finally on its side again as its macro backdrop improves dramatically, which will likely lead to a huge surge in sales for the company from several catalysts in China.


Alibaba Vs. Tencent Holdings Limited

Tencent Holdings (OTCMKTS: TCEHY) is one of Alibaba's main competitors in China and therefore warrants a comparison. Tencent has a larger market cap than Alibaba, with 404.63BN and 275.90B, respectively. The total return between the companies is disproportionate. The five-year return for BABA sits at -32.92% while TCHEY is 15.26%. BABA does not currently pay a dividend, while TCHEY has a dividend rate of $0.20 and a yield of 0.48%. On the EV/Sales ratio, BABA is a cheaper option at 10.21 compared with Tencent's 16.44. BABA's FWD revenue growth is also higher at 11.66%, and TCHEY's revenue growth is 9.98%.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Tencent (TCEHY)
2.4436 of 5 stars
$35.79+1.4%0.50%12.65Hold$222.00
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Alibaba Group right now?

Before you consider Alibaba Group, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Alibaba Group wasn't on the list.

While Alibaba Group currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Matthew North

About Matthew North

Contributing Author

Matthew is a freelance writer and equity analyst who started out by writing coverage on the cryptocurrency market and on emerging technologies. His work on artificial intelligence has been published by the NewScientist magazine and he is a former contributor to FXStreet. Before becoming an analyst, Matthew was a team member of several prominent startups in the crypto and fintech space. Matthew now specializes in covering companies in the technology sector and seeks to uncover stocks and entries with an asymmetric risk to reward ratio.
Contact Matthew North via email at darknetnz@gmail.com.
    Free Email Newsletter

    Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

    Most Read This Week

    Recent Articles

    Search Headlines:

    Latest PodcastFed Raises Rates: 3 Stocks to Watch Newmont Mining, Walmart, AMC

    Axel Merk, President and CIO of Merk Investments has three very different stocks he frames within the current market and economic conditions.

    MarketBeat Resources

    Premium Research Tools

    MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

    Discover All Access

    Market Data and Calendars

    Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

    View Market Data

    Investing Education and Resources

    Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

    Financial Terms
    Details Here
    MarketBeat - Stock Market News and Research Tools logo

    MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

    MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

    © American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
    326 E 8th St #105, Sioux Falls, SD 57103 | contact@marketbeat.com | (844) 978-6257
    MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

    Our Accessibility Statement | Terms of Service | Privacy Policy | Do Not Sell My Information | RSS Feeds

    © 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer.