Alibaba Group Holding Ltd (NYSE:BABA) shares took a big hit after their quarterly revenues came in under expectations, but don’t let this downward trend fool you.
Alibaba is the best buy in e-commerce, and here are three reasons why you should get into BABA stock today.
Alibaba Revenue and Earnings Continue to Skyrocket
Sure, BABA missed its revenue number last quarter after Alibaba earnings failed to meet expectations. But let’s keep this in perspective.
Revenue was up a whopping 40% in Q4, which bodes well for BABA stock long-term. And analysts predict the numbers will continue to rise an additional 30% plus next year alone.
Not sure why, but the naysayers neglect to mention that BABA earnings actually exceeded expectations, going up 6 cents per share last quarter and good for an 8% surprise. Wall Street analysts have responded by predicting an average of 28% growth per year for Alibaba over the next five years.
That should boost BABA stock in both the short term and for years to come, even if in the short-term investors may have been a bit too optimistic. The bottom line is that Alibaba is still growing very fast.
BABA Stock Crushes the Competitors
When looking at Alibaba versus Amazon.com, Inc. (NASDAQ:AMZN) and the differences are stark.
BABA is the actually making money, and that’s even as Alibaba stock is only beginning to break into the Chinese market. Of the 618 million Chinese shopping online, BABA has captured only about half. That represents a ton of potential moving forward.
Compare that with Amazon, which is already mature and has neglected to turn a consistent profit.
And while BABA reported 40% growth in revenue, another e-commerce giant, eBay Inc. (NASDAQ:EBAY) is managing a paltry 9%.
To top it off, Alibaba has a market cap of over 214 billion. That’s nearly as much as AMZN and EBAY combined!
If your choice is one of these three e-commerce players, BABA stock is the winner — hands down.
Analysts Love BABA Stock Still
Rather than dumping millions into their own products and infrastructure, BABA has kept costs low by focusing on the online space. In addition, BABA is focused on growing its mobile business which is where the market is headed. While fees and add space are lower for mobile compared to desktop, investors need to be willing to weather the storm
Analysts are wise to the BABA growth strategy — setting an average target price of over $112 per share. BABA is currently trading under $86.
Clearly analysts don’t think the recent trouble in Alibaba stock will last.
Online shopping continues to grow here and abroad. With BABA revenues on the rise and its continued dominance over competitors, the time to click the buy button on BABA stock is now!
As of this writing, Scott Michnick did not hold any interest in the aforementioned securities.
