U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
When Investing.com’s Fair Value models identified Alibaba Group Holding Limited (NYSE:BABA) as significantly undervalued in March 2024, the stock was trading at $73.40. Today, with shares at $121.26, that analysis has yielded an impressive 63.43% return in just 15 months, demonstrating the power of data-driven valuation models. For investors seeking similar opportunities, our Most undervalued list continues to identify potential market inefficiencies.
Alibaba , China’s leading e-commerce and cloud computing giant, showed strong fundamental potential when our models flagged the opportunity. At the time, the company reported revenues of $130.67 billion and EBITDA of $24.02 billion, with our analysis suggesting significant upside potential of 48.57%. The company’s robust financial health score of 3.5 and strategic positioning in artificial intelligence particularly supported our bullish thesis.
The subsequent performance has validated our analysis. Since March 2024, Alibaba has demonstrated remarkable fundamental improvements, with current revenues reaching $137.24 billion, EBITDA expanding to $26.74 billion, and EPS growing from $5.52 to $7.59. The company’s aggressive expansion in AI technology, evidenced by multiple Qwen model launches and strategic partnerships with global players like BMW and Wix, has driven this growth.
Recent analyst actions further support our original assessment. Morgan Stanley maintains an Overweight rating with a $180 price target, while Barclays and Bernstein have issued similarly bullish outlooks, citing Alibaba’s AI capabilities and cloud services potential. The company’s quick commerce initiatives and international expansion continue to present additional growth vectors.
Our Fair Value methodology combines multiple valuation approaches, including intrinsic worth calculations, margin of safety considerations, and future cash flow analyses. This comprehensive approach, powered by sophisticated algorithms, helps identify market mispricings before they correct. The accuracy of our Alibaba analysis demonstrates the effectiveness of this methodology.
For investors looking to uncover similar opportunities, InvestingPro offers access to our complete Fair Value analysis system, along with real-time alerts, comprehensive financial health scores, and AI-powered insights. With our proven track record in identifying market inefficiencies, InvestingPro helps investors make more informed decisions based on data-driven analysis rather than market sentiment alone.