{"id":38932,"date":"2025-05-16T12:13:59","date_gmt":"2025-05-16T12:13:59","guid":{"rendered":"https:\/\/coincentral.com\/?p=38932"},"modified":"2025-05-16T12:13:59","modified_gmt":"2025-05-16T12:13:59","slug":"alibaba-group-baba-stock-why-analysts-see-34-upside-despite-q4-stumble","status":"publish","type":"post","link":"https:\/\/coincentral.com\/alibaba-group-baba-stock-why-analysts-see-34-upside-despite-q4-stumble\/","title":{"rendered":"Alibaba Group (BABA) Stock: Why Analysts See 34% Upside Despite Q4 Stumble"},"content":{"rendered":"<h2>TLDR:<\/h2>\n<ul>\n<li>Alibaba stock fell 7.6% after missing Q4 earnings and revenue expectations<\/li>\n<li>Cloud revenue grew impressively at 18% year-over-year with AI products showing triple-digit growth<\/li>\n<li>Taobao and Tmall Group revenue increased 9%, ahead of expectations<\/li>\n<li>The company bought back nearly $12 billion in shares and announced a two-part dividend<\/li>\n<li>Analysts maintain Buy ratings with average price targets suggesting 34% upside potential<\/li>\n<\/ul>\n<hr \/>\n<p>Alibaba Group Holding reported disappointing fiscal fourth-quarter <a href=\"https:\/\/www.barrons.com\/articles\/alibaba-stock-buy-earnings-6f435a94?mod=hp_WIND_A_2_3\">results<\/a> on Thursday, sending its American depositary shares down 7.6% to $124.17. Despite the setback, many analysts remain optimistic about the Chinese e-commerce and cloud computing giant&#8217;s future prospects.<\/p>\n<figure id=\"attachment_38933\" aria-describedby=\"caption-attachment-38933\" style=\"width: 1163px\" class=\"wp-caption alignnone\"><img fetchpriority=\"high\" decoding=\"async\" class=\"size-full wp-image-38933\" src=\"https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932.png\" alt=\"Alibaba Group Holding Limited (BABA)\" width=\"1163\" height=\"492\" srcset=\"https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932.png 1163w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932-300x127.png 300w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932-131x55.png 131w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932-768x325.png 768w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932-50x21.png 50w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932-150x63.png 150w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130932-450x190.png 450w\" sizes=\"(max-width: 1163px) 100vw, 1163px\" \/><figcaption id=\"caption-attachment-38933\" class=\"wp-caption-text\"><a href=\"https:\/\/finance.yahoo.com\/quote\/BABA\/\">Alibaba Group Holding Limited (BABA)<\/a><\/figcaption><\/figure>\n<p>The company reported net income of 12.38 billion Chinese yuan ($1.71 billion) for the quarter ended March 31. Revenue climbed 7% from a year ago to $32.58 billion.<\/p>\n<p>These figures fell short of analyst expectations. Wall Street had projected net income of $2.93 billion and revenue of $33.28 billion, according to FactSet.<\/p>\n<p>The stock drop comes after Alibaba shares had surged approximately 60% since the start of the year. This strong performance may have set the bar too high for the quarterly report.<\/p>\n<h2>Cloud Computing and AI Drive Growth<\/h2>\n<p>Despite the headline miss, there were several bright spots in the report. Alibaba&#8217;s cloud business showed particularly strong momentum, with revenue increasing 18% year-over-year to RMB30.1 billion.<\/p>\n<p>AI-related product sales have been a standout performer. These products have now delivered triple-digit growth for seven consecutive quarters.<\/p>\n<p>The company&#8217;s open-source AI model series, Qwen3, is also gaining traction in the market. This progress in AI capabilities is a key factor in analysts&#8217; continued optimism.<\/p>\n<p>Morgan Stanley analyst Gary Yu noted that Alibaba&#8217;s cloud performance met expectations. He sees the cloud division as central to the company&#8217;s growth strategy, especially as AI adoption accelerates across China.<\/p>\n<p>Core retail operations also showed resilience. Revenue from the Taobao and Tmall Group grew 9% year over year, exceeding expectations according to Benchmark Equity Research analyst Fawne Jiang.<\/p>\n<p>The company&#8217;s international digital commerce segment grew more than 20% in the quarter. Its digital media and entertainment segments also saw growth exceeding 20%.<\/p>\n<h2>Shareholder Returns and Valuation<\/h2>\n<p>Alibaba has been actively returning cash to shareholders. The company repurchased nearly $12 billion worth of shares in fiscal 2025, reducing its share count by more than 5%.<\/p>\n<p>A two-part dividend totaling $4.6 billion is expected to be paid out in July. This package includes both the regular payout and a special dividend.<\/p>\n<p>From a valuation perspective, Alibaba trades at a forward price-to-earnings ratio of 13 times. This represents just over half of its five-year average, suggesting the stock may be undervalued despite its strong run-up earlier this year.<\/p>\n<p>Consensus estimates call for earnings per share to climb 10% this fiscal year to $10. Analysts project further growth of more than 12% in the following fiscal year.<\/p>\n<figure id=\"attachment_38935\" aria-describedby=\"caption-attachment-38935\" style=\"width: 830px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"wp-image-38935 size-full\" src=\"https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817.png\" alt=\"\" width=\"830\" height=\"310\" srcset=\"https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817.png 830w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817-300x112.png 300w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817-131x49.png 131w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817-768x287.png 768w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817-50x19.png 50w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817-150x56.png 150w, https:\/\/coincentral.com\/wp-content\/uploads\/2025\/05\/Screenshot-2025-05-16-130817-450x168.png 450w\" sizes=\"(max-width: 830px) 100vw, 830px\" \/><figcaption id=\"caption-attachment-38935\" class=\"wp-caption-text\">Source: TipRanks<\/figcaption><\/figure>\n<p>The stock currently has 16 unanimous Buy ratings from analysts tracked by TipRanks. The average price target stands at $167.13, implying nearly 35% upside potential from current levels.<\/p>\n<p>UBS analyst Kenneth Fong maintained a Buy rating with a $180 price target. He pointed to steady trends in Alibaba&#8217;s core commerce business and narrowing losses in non-core areas.<\/p>\n<p>Citi analyst Alicia Yap also keeps a Buy rating with a $169 price target. Benchmark&#8217;s Jiang has set an even more optimistic target of $190.<\/p>\n<p>While challenges remain, including concerns about the Chinese economy and ongoing <a href=\"https:\/\/coincentral.com\/us-stock-market-set-for-fifth-straight-win-as-trade-tensions-ease-with-china\/\">trade tensions<\/a>, many of the catalysts for Alibaba&#8217;s growth\u2014including the AI revolution and the Chinese government&#8217;s efforts to support economic growth\u2014remain intact.<\/p>\n<p>The recent earnings miss appears to be a bump in the road rather than a sign of deeper problems. For investors with a longer-term horizon, the current pullback could represent a buying opportunity.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>TLDR: Alibaba stock fell 7.6% after missing Q4 earnings and revenue expectations Cloud revenue grew impressively at 18% year-over-year with AI products showing triple-digit growth Taobao and Tmall Group revenue increased 9%, ahead of expectations The company bought back nearly $12 billion in shares and announced a two-part dividend Analysts maintain Buy ratings with average<\/p>\n","protected":false},"author":9005,"featured_media":38934,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"iawp_total_views":115,"footnotes":""},"categories":[28152],"tags":[],"class_list":{"0":"post-38932","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stocks"},"wppr_data":{"cwp_meta_box_check":"No"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - 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