Jefferies Sees over 60% Growth Potential for Alibaba Stock

Investing in Alibaba Group (BABA) might seem unappealing at first glance. The company has struggled to deliver strong performance over recent quarters, largely due to China’s sluggish economy and significant issues in its real estate sector. Nevertheless, analysts remain optimistic about Alibaba’s prospects, maintaining a bullish outlook on the stock.

Last week, Jefferies analyst Thomas Chong reaffirmed his Buy rating on BABA, forecasting more than 60% growth potential. Chong’s optimism is backed by Alibaba’s anticipated strong performance for the December quarter. Overall, the stock carries a Strong Buy rating on TipRanks with 11 Buy recommendations.

Jefferies Confident in Alibaba’s Growth

Jefferies’ rating reflects Alibaba’s strong position in driving technological progress across different industries. He believes Alibaba’s focus on building infrastructure and developing new products will lead to significant revenue growth and cost savings, making it a promising company for future growth.

Additionally, Chong expects Alibaba to continue performing well in the December quarter, noting the success of the “Double-11” shopping event. The event helped boost the year-over-year growth in GMV (gross merchandise volume) for Taobao and Tmall platforms.  He also predicts that Alibaba’s Cloud revenue will grow faster year-over-year, fueled by strong demand for AI (artificial intelligence) services.

Insights from TipRanks’ Bulls Say, Bears Say

TipRanks’ “Bulls Say, Bears Say” tool provides a glimpse into analysts’ viewpoints on Alibaba’s stock.

Bulls are optimistic about the strong demand for AI computing and applications, which is expected to fuel significant growth in Alibaba’s international digital commerce and cloud revenue streams. Analysts also praise Alibaba for its diversified business model spread across multiple industries.

On the other hand, bears pointed out the expected loss of $1.3 billion from the sale of Intime. In December, Alibaba sold its 99% stake in department store chain Intime to Youngor Group for $1.02 billion, marking a shift from retail to its core e-commerce and cloud businesses.  

Is BABA Stock a Good Buy?

Turning to Wall Street, BABA stock has a Strong Buy consensus rating based on 11 Buys and one Hold assigned in the last three months. At $121.33, the average Alibaba price target implies a 36.1% upside potential.

Year-to-date, BABA stock has gained over 5%.

See more BABA analyst ratings

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