Analysts remain optimistic about the Hong Kong-listed Alibaba Group Holding Limited (HK:9988), predicting continued growth for this tech giant. In July, Alibaba’s stock received three recommendations, including two Buy ratings from DBS and Jefferies. Analysts are bullish on the stock, considering its dominant position in the e-commerce industry and its diversified business model.
Alibaba is a Chinese technology company, widely known for its online marketplace. Over the years, the company has expanded its portfolio to include cloud computing, digital entertainment, logistics, and financial services.
Let’s a look at these recent ratings and explore analysts’ perspectives on Alibaba stock.
DBS Bullish on Alibaba’s Future Growth
Last month, analyst Sachin Mittal from DBS reiterated a Buy rating while predicting an upside potential of 42.4%. DBS expects a CAGR (compound annual growth rate) of 5% from FY24 to FY27 in the company’s core marketplaces, Taobao and Tmall.
In the fourth quarter of FY24, Taobao and Tmall business saw a modest 4% year-on-year revenue increase to ¥93.2 billion. The company is facing growing competition in the e-commerce sector from rivals such as PDD Holdings (PDD), which owns discount platforms like Pinduoduo and Temu.
In addition, DBS is confident in the company’s cloud computing business. It expects the Cloud segment to sustain a steady 6% annual growth rate, driven by rising demand for public cloud and AI-related products.
Mittal also highlighted Alibaba’s customer management revenue (CMR) as a key driver for the share price, He expects a steady recovery in CMR in FY25 due to increased merchant activity and rising consumer demand.
Alibaba is set to release its first quarter results for FY25 on August 15. While short-term performance may be under pressure due to fierce competition and a slowing Chinese economy, analysts remain optimistic about the stock’s long-term potential.
Other Analyst Ratings
Analyst Thomas Chong from Jefferies also maintained a Buy rating on the stock, forecasting 46.3% upside.
Meanwhile, Macquarie analyst Ellie Jiang reiterated a Hold rating on the stock, predicting a modest upside potential of 2.8%.
Is Alibaba Stock a Good Buy Right Now?
On TipRanks, 9988 stock has received a Moderate Buy rating based on two Buys and one Hold recommendation. The Alibaba share price target is HK$99.90, which implies 30.5% upside potential on the current trading price.
Year-to-date, Alibaba stock has gained 4.2%.
