Alibaba Group (NYSE:BABA) Shares Down 1.1% – Here’s Why

Alibaba Group Holding Limited (NYSE:BABA)’s share price traded down 1.1% on Thursday. The company traded as low as $104.75 and last traded at $105.8460. 10,862,204 shares were traded during mid-day trading, a decline of 7% from the average daily volume of 11,637,582 shares. The stock had previously closed at $107.00.

Alibaba Group News Roundup

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

• Positive Sentiment: Possible Beijing intervention supports Chinese stocks: Reports that China has limited sell orders helped lift U.S.-listed Chinese equities, including Alibaba, by improving market sentiment and reducing near-term selling pressure. Alibaba Stock Rises as China Limits Sell Orders
• Positive Sentiment: Analysts remain constructive on cloud and AI growth: Nomura maintained a Buy rating and a $178 price target, saying AI cloud expansion could offset pressure on Alibaba’s core e-commerce operations. Nomura Buy Rating and Target
• Positive Sentiment: Jefferies forecasts accelerating cloud growth: Jefferies expects Alibaba’s cloud revenue growth to exceed 50% in fiscal 2028, supported by AI cloud, computing services, applications and continued execution across e-commerce. The firm retained its Buy rating. Alibaba Cloud Revenue Growth Forecast
• Neutral Sentiment: Expansion plans could strengthen infrastructure: Alibaba is reportedly in early discussions about securing power supplies for a data center in Spain, although the talks are preliminary and offer no immediate financial impact. Alibaba in Early Talks on Spain Data Center Power Supply
• Negative Sentiment: AI spending is pressuring returns: Alibaba’s investment blitz and elevated capital expenditures are increasing margin pressure and remain the main reason investors question whether the stock has reached a durable bottom. E-commerce weakness adds to the concern. Alibaba Stock Bottom Analysis

Analysts Set New Price Targets

BABA has been the topic of a number of recent research reports. Benchmark reiterated a “buy” rating on shares of Alibaba Group in a research report on Thursday, August 20th. HSBC set a $170.00 target price on Alibaba Group in a research report on Thursday, July 9th. Robert W. Baird decreased their price target on Alibaba Group from $164.00 to $160.00 and set an “outperform” rating on the stock in a report on Friday, August 21st. Nomura decreased their price target on Alibaba Group from $207.00 to $178.00 and set a “buy” rating on the stock in a report on Thursday, June 25th. Finally, Citigroup lifted their price objective on Alibaba Group from $190.00 to $193.00 and gave the stock a “buy” rating in a research report on Thursday. Two analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and six have given a Hold rating to the company’s stock. According to MarketBeat, Alibaba Group presently has a consensus rating of “Moderate Buy” and a consensus price target of $183.44.

Alibaba Group Trading Up 5.3%

The business has a 50 day simple moving average of $116.10 and a 200-day simple moving average of $119.59. The stock has a market capitalization of $276.66 billion, a price-to-earnings ratio of 26.95, a PEG ratio of 1.41 and a beta of 0.47. 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) last released its quarterly 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 business had revenue of $39.64 billion for the quarter, compared to analyst estimates of $39.52 billion. During the same period in the prior year, the business earned $14.75 EPS. The company’s revenue for the quarter was up 8.6% compared to the same quarter last year. As a group, equities analysts expect that Alibaba Group Holding Limited will post 5.80 earnings per share for the current year.

Insider Activity

In related news, CEO Yongming Wu purchased 350,000 shares of the business’s stock in a transaction on Monday, August 24th. The shares were purchased at an average price of $14.24 per share, with a total value of $4,984,000.00. Following the completion of the purchase, the chief executive officer owned 1,364,418 shares in the company, valued at $19,429,312.32. This represents a 34.50% increase in their position. The acquisition was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, CFO Hong Xu sold 103,046 shares of the company’s stock in a transaction that occurred on Friday, September 25th. The shares were sold at an average price of $13.68, for a total transaction of $1,409,669.28. Following the completion of the transaction, the chief financial officer owned 406,450 shares of the company’s stock, valued at $5,560,236. This trade represents a 20.23% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last ninety days, insiders sold 999,971 shares of company stock worth $13,563,304. Corporate insiders own 12.50% of the company’s stock.

Hedge Funds Weigh In On Alibaba Group

A number of large investors have recently added to or reduced their stakes in the company. AMF Tjanstepension AB boosted its holdings in shares of Alibaba Group by 4.1% during the 1st quarter. AMF Tjanstepension AB now owns 2,206,634 shares of the specialty retailer’s stock worth $276,844,000 after buying an additional 86,613 shares during the period. Altshuler Shaham Ltd bought a new stake in shares of Alibaba Group during the fourth quarter worth approximately $160,410,000. Bamco Inc. NY grew its position in shares of Alibaba Group by 6.8% in the fourth quarter. Bamco Inc. NY now owns 1,071,647 shares of the specialty retailer’s stock valued at $157,082,000 after purchasing an additional 67,948 shares during the last quarter. Baird Financial Group Inc. increased its stake in shares of Alibaba Group by 6.7% during the second quarter. Baird Financial Group Inc. now owns 754,749 shares of the specialty retailer’s stock worth $72,441,000 after purchasing an additional 47,358 shares during the period. Finally, Bbfit Investments PTE Ltd. bought a new stake in Alibaba Group in the 4th quarter valued at $106,828,000. Institutional investors own 13.47% of the company’s stock.

Alibaba Group Company Profile

Alibaba Group Holding Limited is a technology and commerce company founded in 1999 and headquartered in Hangzhou, China. It operates a broad digital ecosystem connecting consumers, merchants, brands and businesses through online marketplaces and related services.

The company’s China commerce businesses include Taobao and Tmall, while its international commerce operations include Alibaba.com, AliExpress, Lazada and Trendyol. Alibaba also provides logistics services through Cainiao, consumer services through platforms such as Ele.me and Freshippo, and digital media and entertainment offerings.

Alibaba Cloud provides cloud computing, data management, artificial intelligence and other technology services to businesses and organizations.