Sign InAlibaba's Technical and Fundamental Analysis: Hold Recommendation for Undervalued Stock
Summary
On June 23, 2023, Alibaba's stock price closed at $84.92 with a -2.27% change, trading below both its 50-day and 200-day moving averages, and facing ongoing fluctuations in the short term, with potential for slight gains on June 26, but investors should remain vigilant due to the uncertain impacts of recent news events and changes in leadership.
Technical Analysis
Alibaba Group Holding Limited (BABA) closed at $84.92 on June 23, 2023, with a -2.27% change. The trading volume was 14.73 million shares, lower than the average volume of 23.48 million shares. Currently, BABA is trading below both its 50-day moving average of $86.14 and the 200-day moving average of $88.56. The stock's RSI14 is 52, indicating an overall sideways market trend.
The stock experienced a low of $84.37 and a high of $85.94 during the day. Comparatively, BABA's year high is $125.84, and the year low is at $58.01. The MACD (3-month) is at 0.93, suggesting a moderately positive momentum.
Fundamental Analysis
Alibaba has a market cap of $217.61 billion and 2.56 billion shares outstanding. Its EPS stands at $3.66, with a P/E ratio of 23.2. The discounted cash flow (DCF) is currently $158.08, indicating an undervalued stock.
Its target high is $300 while its target low is $83.89. The target consensus is $174.58, and the target median is $163.50.
Recent News
Recent news about Alibaba's corporate shakeup, specifically the announcement of a new CEO and Chairman, has spooked Wall Street and caused the stock price to decline. However, some analysts believe this change in leadership could be beneficial for the undervalued stock.
Additionally, analysts have found MercadoLibre's growth story to be more exciting than both Alibaba and Amazon, with triple-digit earnings growth in recent quarters and revenue growth of 35% or more.
Stock Prediction
Considering the technical and fundamental data, BABA is expected to face ongoing fluctuations in the short term, with potential for a slight increase on June 26, 2023, the next trading day. The stock may also experience some moderate gains in the upcoming week. However, investors should remain vigilant due to the uncertain impacts of the corporate shakeup and recent news events.
Final Evaluation
Based on the data provided, Alibaba is currently categorized as a Hold. The stock is undervalued, as indicated by the DCF, but current market conditions and recent news events are likely limiting its potential growth in the short term. Investors should keep an eye on further developments and news regarding Alibaba's corporate shakeup to more accurately assess the stock's performance in the future.
