Alibaba shares rose on earnings and spinoff news. But is Alibaba stock worth buying now?

Alibaba shares fell sharply in premarket trading Thursday after the company reported revenue growth of 9% and adjusted EBITDA growth of 18%. Alibaba stock looks like it’s on sale right now. But is Alibaba stock worth buying now?

this Earnings Conference Call It is scheduled for 7:30 a.m. Eastern time.


Alibaba also announced that its annual cash dividend for fiscal year 2023 will be US$1 per American depositary receipt, which will be paid on January 11 to holders of record on December 21.

Alibaba (BabeThe company also abandoned plans to spin off its cloud unit in light of recent expansion of chip restrictions in the United States.

Alibaba shares gapped above its 50-day moving average on Wednesday, helped by the Chinese internet giant’s strong earnings report Jingdong (JD).

Sentiment on Chinese stocks was also positive on Wednesday after China’s October retail sales and industrial production came in better than expected.

On September 11, Alibaba faced selling pressure, and outgoing CEO Zhang Yong unexpectedly resigned from his position as head of the company’s cloud business.

The company said in June that Zhang would step down as chairman and CEO to focus on Alibaba’s cloud intelligence unit. In May, Alibaba announced plans to spin off its cloud business into an independent public company.

recent earnings

Market sentiment on Alibaba stock was positive on August 10 as Wall Street assessed Alibaba’s latest earnings report.

Adjusted profit rose 37% to $2.40 per share, well above the consensus estimate of $2.02. Revenue rose 5% to $32.3 billion, beating consensus estimates of $30.7 billion. The revenue growth ended four consecutive quarters of revenue declines.

On July 7, Alibaba shares soared above the 200-day moving average after Chinese regulators imposed nearly $1 billion in changes to Alibaba’s financial arm, Ant Group.

Ant Group’s initial public offering was halted by Chinese regulators in late 2020 because it did not meet listing requirements. In April 2021, regulators fined Alibaba $2.8 billion in an antitrust investigation. But after three years of regulatory scrutiny, optimism is growing that Beijing is about to end its crackdown on technology companies.

In mid-May, the stock fell below its 200-day moving average after the Chinese e-commerce giant reported its fourth consecutive quarter of revenue declines.

Alibaba announced adjusted profit per share of US$1.56, an annual increase of 24%, while revenue fell 6% to US$30.3 billion. Alibaba also said that its board of directors approved the spin-off of its cloud intelligence business within 12 months. Hema retail chain for groceries and fresh produce and its logistics subsidiary Cainiao Smart Logistics also received IPO approval.

On March 28, there were reports that Alibaba planned to split into six independent divisions, and the stock price soared 14%.

The company said the businesses will have the ability to raise external funding and even seek an IPO. According to reports, the company may retain its cloud/artificial intelligence business and large e-commerce business.

  • Cloud intelligence
  • Taobao Tmall Business
  • local service
  • Cainiao Smart Logistics
  • Global digital commerce
  • Digital media and entertainment

Alibaba Stock News

On April 12, Alibaba’s stock price plummeted after news broke that Japanese conglomerate SoftBank sold most of its shares in Alibaba. SoftBank once held a 25% stake in Alibaba, worth more than $100 billion.

One day ago, Alibaba’s stock price reversed lower on April 11. The company launched its own generative artificial intelligence system and officially joined the artificial intelligence race.

Alibaba said the ChatGPT-style AI system will first be added to Alibaba’s workplace messaging app DingTalk and its smart speaker system Tmall Genie.

After the news came Baidu (Baidu) launched its own artificial intelligence chatbot in April.

On February 9, it was reported that Alibaba Damo Academy (a technology-focused research institution) was developing a chatbot similar to ChatGPT, and Alibaba’s stock price rose 3%. Vast market.

But regulatory concerns about Chinese stocks such as Alibaba have been waning.One of China’s top regulators recently said China is close to concluding investigations into online platform operators such as Alibaba

Sentiment on Chinese stocks weakened in October after the Biden administration announced new restrictions on China’s access to U.S. semiconductor technology, including curbs on the export of certain types of chips used in supercomputing and artificial intelligence and stricter rules on chip sales. The equipment is shipped to China.

In late August last year, Alibaba shares surged on reports that Beijing and U.S. regulators were close to reaching an agreement on audit inspections.

Sino-US relations

In late July 2022, the U.S. Securities and Exchange Commission added Alibaba to the list of Chinese companies at risk of delisting because they did not disclose their books to U.S. accounting regulators.

Alibaba shares rose on June 17, but gave up early gains after Reuters reported that China’s central bank accepted Ant Group’s application to set up a financial holding company.

In early November 2020, Chinese authorities suspended Ant Group’s $34.5 billion IPO in Shanghai and Hong Kong. Ant Group is the fintech arm of Alibaba. Shanghai Stock Exchange officials said the company was unable to meet the conditions due to changes in the regulatory environment.

Increased regulatory scrutiny has weighed on Alibaba and other Chinese stocks over the past few years. In addition to a strict regulatory environment, Chinese stocks also face a slowing economy.

In April 2020, Chinese regulators launched a $2.8 billion overhaul of Alibaba following an antitrust investigation. At the time, Alibaba stock looked ready to break out of its downtrend. But the stock was rejected at its 50-day moving average. It tried in late April, and the stock rose above its 50-day moving average again, but sellers pushed the stock lower again.

On November 10, Alibaba’s stock price plunged another 8% after Chinese regulators announced draft new antitrust rules targeting Chinese online platforms such as Alibaba and

Alibaba stock fundamental analysis

Despite substantial weakness in fundamentals in recent quarters, the company has delivered five-year annualized earnings growth of 11%.

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Alibaba’s Overall rating 72 items (rated on a scale of 1-99, with 99 being the best) have declined as price performance has lagged in recent months.

But an annual return on equity of 14% gives Alibaba a solid return SMR rating B’s (sales + profit margin + return on equity) IBD inventory check (On a scale from A to E, with the highest being A).

Stock checking tools quickly identify group leaders based on a combination of fundamental and technical factors.

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Zacks expects Alibaba’s current fiscal 2024 earnings per share to be $8.93, up 12% from fiscal 2023, and growth will slow slightly in fiscal 2025, up 4% to $9.33.

click here to the highest-rated stock in the group.

Alibaba stock technical analysis

Alibaba’s relative strength line The index has been trending after several months of underperformance compared to the S&P 500.

A stock’s relative strength line, which can be found on’s daily and weekly charts, compares a stock’s daily price performance to the S&P 500 Index. An upward sloping RS line means the stock is outperforming the S&P 500. A downward sloping line means the stock is outperforming the S&P 500. Shares lagged the S&P 500.

Alibaba’s Accumulate/issue ratings It’s borderline B-.

Alibaba Stock: Is It Worth Buying Now?

overhead supply The issue remains a concern for Alibaba stock, which is down about 30% from its highs.

On November 15, 2022, Alibaba’s stock price broke above the 50-day moving average, which was enough to break Alibaba’s stock price out of the downward trend and issue a buy signal. But the stock is starting to trend upward after surging 19% in the week ended December 2.

As of the week of January 6, the follow-up day for the Nasdaq Composite Index and the S&P 500 Index, Alibaba’s stock price exploded again, rising more than 16% from before the pullback.

On April 12, Alibaba’s stock price fell sharply below its 50-day moving average, hurting its stock price. Cup holder with handleThis is a flawed pattern because the handle that started forming on March 31 is slightly in the lower half of the base.

Alibaba shares gapped above their 50-day moving average on Wednesday and closed near the session high, a strong sign for Chinese stocks overall. Normally, this would be a buy signal, but Alibaba’s 200-day moving average (currently just below 90) remains a potential signal resistance to watch.

A decisive break above the 200-day line would be enough to break Alibaba stock out of its latest downtrend and issue a buy signal. But at present, this possibility is unlikely because the seller has decided to act.

Follow Ken Shreve on Twitter: @IBD_KShreve Get more market insights and analysis now.

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