Does Alibaba Stock have a real 55% lead from here?



<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Shares of Alibaba (NYSE:BABA) have been on the brink of improvement this week, after several miserable months of action. The stock of BABA is evolving even higher on Thursday, after the online moloch based in China reported the results for the second quarter. "Data-reactid =" 11 "> The shares of Alibaba (NYSE: BABA) have improved this week, after several miserable trading months.BABA shares are moving even further on Thursday, after the online-based online moloch the results for the second quarter reported.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Alibaba gains turnover and revenue expectation, grows faster yield an insane 61 % year-on-year to $ 12.23 billion, find me another $ 450 billion company with quarterly sales growth north of 60%. "For reference, & nbsp; Amazon (NASDAQ:AMZN) recently reported growth of around 40%, which was also very solid given the size. "data-reactid =" 12 "> Alibaba outperforms earnings and revenue forecasts, revenue growth insane 61% year-on-year to $ 12.23 billion Find me another $ 450 billion company with quarterly revenue growth north of 60%. reference Amazon (NASDAQ: AMZN) recently reported a growth of about 40%, which was also very solid given the size.

Alibaba Earnings

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Shares of Alibaba and many other Chinese companies – such as JD.com (NASDAQ:JD) Baidu (NASDAQ:BIDU) iQiyi (NASDAQ:I.Q) and others – were under pressure when trade wars between the US and China were in rough waters. "data-reactid =" 14 "> Shares of Alibaba and many other Chinese companies – such as JD.com (NASDAQ:JD) Baidu (NASDAQ:BIDU) iQiyi (NASDAQ:I.Q) and others – were under pressure when trade wars between the US and China were on rough waters.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "InvestorPlace – Stock Market News, Stock Advice & amp; Tips for trade"data-reactid =" 15 "> InvestorPlace – Stock Exchange, Stock Exchange Advice & Trading Tips

This is interesting, since many of these companies are not affected by the problem. What, for example, does streaming of media on iQiyi have to do with rates? However, recent optimism about the spits of the countries has these stocks higher.

The muted impact was clear from the Alibaba update over the last three months of its activities. Core commerce, Alibaba's largest company, saw growth of 61%, in line with its overall sales growth profile. However, the RMB 69.2 billion in sales came a little short of consensus expectations for RMB 70.2 billion.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "No surprise was the power of cloud computing. YoY for Alibaba, a figure that would not surprise many investors if we look at the segment strength we have seen in names like Microsoft (NASDAQ:MSFT), Amazon and alphabet (NASDAQ:GOOGLNASDAQ:GOOG) so far in 2018. I keep believing there is still a long growth circle with regard to the cloud. "data-reactid =" 20 "> No surprise was the power of cloud computing: sales increased by 95% YoY for Alibaba, a figure that would not surprise many investors if we look at the segment strength we saw in names like Microsoft (NASDAQ: MSFT), Amazon and Alphabet (NASDAQ: GOOGL, NASDAQ: GOOG) so far in 2018. I still believe that there is still a long growth circle with regard to the cloud.

BABA Stock rating

Unlike shares of most of the major technology companies, BABA shares held a large proportion of 2018 in a series. Some claim that the stock is overvalued, while others can not understand what Alibaba actually does. Admittedly, it is much easier for a US-based investor to understand what Amazon is doing or what Microsoft is doing, compared to what Alibaba does.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) Vice President Charlie Munger had some thoughts about China at the company's most recent annual meeting. He said that because most American investors do not understand the country, the culture or the enormous size of the population and have not done their research, they lack a large investment opportunity in the long term. "Data reactid =" 23 ">Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) Vice President Charlie Munger had some thoughts about China at the company's most recent annual meeting. He said that because most American investors do not understand the country, the culture or the enormous size of the population and have not done their research, they lack a large investment opportunity in the long run.

Alibaba is a great example, even if the BABA shares are traded approximately 30 times this year. Do investors realize that analysts expect revenue to grow by 60% this year and by almost 40% next year? Or is it forecast that this year the profit will grow by more than 25% and next year in the fiscal 2020 next year will grow to 32%?

The ecosystem continues to grow, as more and more customers, retailers and mobile monthly active users continue to grow. It is the largest e-commerce solutions company in one of the world's largest e-commerce markets.

BABA shares trade

graph of BABA shares after profit

Aaron Kessler, analyst of Raymond James, hit a $ 280 price target on BABA shares last week. Surprisingly MKM Partners & # 39; Rob Sanderson did the same earlier this month. That is about $ 100 per share above the current level or more than 55% upside down. But even more astonishing is that Susquehanna analysts have allocated a $ 305 price target on the street to BABA shares.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To reach these elevated levels, Alibaba stock needs to resist , the shares are about 20 points higher than ours buy recommendation near long-term support. Now, however, we come in a conjunction of moving averages. The moving averages of 50 days, 100 days and 200 days could all work as resistance, while downtrend resistance (purple line) will not benefit BABA shares. "Data-reactid =" 39 "> In order to get this towering access Alibaba shares must pass through the resistance, the shares have risen about 20 points from our purchase recommendation to near-long-term support. Now we come to a merger of advancing averages.The 50-day 100-day and moving averages of 200 days could all work as resistance, while downtrend resistance (purple line) will no longer give BABA stock.

Long-term investors can argue for a long time to remain Alibaba shares. But bulls in the short term would have to wait for an outbreak over this $ 185 to $ 188 area before they decide whether they should go on for a long time.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. At the time of writing, Bret Kenwell did not take up a position in any of the above effects."data reactid =" 41 ">Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. At the time of writing, Bret Kenwell did not take up a position in any of the above effects.

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