DBS analyst Sachin Mittal maintains a positive outlook on Alibaba Group Holding Limited (HK:9988), projecting a potential upside of over 30%. Mittal confirmed his Buy rating on the stock today, considering the company’s strong status as the top e-commerce provider in China and its encouraging growth potential in global markets. Overall, the stock has a Moderate Buy consensus rating on TipRanks.
Alibaba Group is a Chinese technology firm focused on e-commerce, retail, internet services, and technology solutions.
DBS Predicts Strong Growth for Alibaba
DBS is bullish on the recovery of Alibaba’s core e-commerce platforms, Taobao and Tmall, along with the prospects of its international commerce platforms and cloud computing services.
Mittal believes that although Alibaba’s market share has dropped, its primary e-commerce platforms, Taobao and Tmall, are beginning to rebound, exhibiting double-digit growth. Mittal also expects the EBITA (earnings before interest, taxes, and amortization) margin for Taobao and Tmall to stabilize, enhancing the overall profitability of the company.
Additionally, Mittal highlights that the International commerce segment will be a key growth driver for the company moving forward. For the quarter that ended on June 30, 2024, AIDC (Alibaba International Digital Commerce) reported a 32% year-over-year growth, reaching ¥29.3 billion. This was driven by increased investments in its brands AliExpress and Trendyol to boost brand awareness in key European and Gulf markets. DBS expects International segment revenue to grow at a compound annual growth rate (CAGR) of 23% from FY24 to FY27.
Meanwhile, DBS is also confident in the company’s Cloud Computing business and expects a CAGR of 9% over the same period. This growth is expected to be driven by rising demand for public cloud and AI (artificial intelligence)-related products.
TipRanks Offers Star Ranking
According to the TipRanks Star Ranking, Mittal holds a five-star rating as an analyst. Mittal ranks 100 out of more than 9,000 analysts tracked on TipRanks. He has a success rating of 83% and has achieved an average return per rating of 22.6% over the past year.
TipRanks assesses various financial experts based on their success rate, average returns, and statistical significance. Users can utilize this ranking to find and monitor top financial experts while assessing their performance on specific stocks. This, in turn, can assist them in uncovering new investment opportunities.
Are Alibaba Shares a Good Buy?
Year-to-date, Alibaba stock has gained 32%.
On TipRanks, 9988 stock has received a Moderate Buy rating from analysts, based on four Buy and two Hold recommendations. The Alibaba share price target is HK$102.58, which implies a growth rate of 12.35% on the current trading price.
