Zacks Investment Research Downgrades Alibaba Group (BABA) to Strong Sell

Alibaba Group (NYSE:BABA) was downgraded by Zacks Investment Research from a “hold” rating to a “strong sell” rating in a research note issued on Monday.

According to Zacks, “Alibaba continues to face growing competition from the domestic as well as foreign e-commerce companies despite of its well-performing e-commerce platform. Further, intensifying competition in the global cloud market does not bode well for its initiatives toward global expansion. Further, macro economic conditions in China are major concerns. Also, Alibaba’s increasing investments might hurt its profitability. Notably, the stock has underperformed the industry it belongs to over a year. However, the company remains confident on its core e-commerce business, with the support of its New Retail strategy and FashionAI. Also, its expanding cloud business remains positive.”

Several other research analysts have also recently issued reports on the company. BNP Paribas assumed coverage on Alibaba Group in a research report on Thursday, June 14th. They set a “buy” rating for the company. KeyCorp raised Alibaba Group to a “buy” rating and set a $235.00 target price for the company in a research report on Monday, July 9th. JPMorgan Chase & Co. decreased their target price on Alibaba Group from $230.00 to $215.00 and set an “overweight” rating for the company in a research report on Friday, August 24th. MKM Partners decreased their target price on Alibaba Group to $270.00 and set a “buy” rating for the company in a research report on Wednesday, September 12th. Finally, UBS Group set a $245.00 target price on Alibaba Group and gave the company a “buy” rating in a research report on Friday, August 24th. One research analyst has rated the stock with a sell rating, one has issued a hold rating, twenty-eight have given a buy rating and two have given a strong buy rating to the stock. The company currently has an average rating of “Buy” and an average price target of $229.16.

Shares of NYSE:BABA traded down $2.66 on Monday, hitting $161.97. 154,707 shares of the company’s stock were exchanged, compared to its average volume of 22,771,652. The stock has a market cap of $421.64 billion, a P/E ratio of 40.24, a P/E/G ratio of 1.20 and a beta of 2.41. Alibaba Group has a 1-year low of $152.85 and a 1-year high of $211.70. The company has a debt-to-equity ratio of 0.26, a quick ratio of 1.44 and a current ratio of 1.44.

Alibaba Group (NYSE:BABA) last released its quarterly earnings data on Thursday, August 23rd. The specialty retailer reported $0.66 earnings per share (EPS) for the quarter, missing the Thomson Reuters’ consensus estimate of $0.74 by ($0.08). The business had revenue of $12.23 billion for the quarter, compared to analyst estimates of $12.25 billion. Alibaba Group had a return on equity of 14.18% and a net margin of 20.57%. equities research analysts predict that Alibaba Group will post 3.96 EPS for the current year.

Several hedge funds have recently modified their holdings of the company. Duncker Streett & Co. Inc. increased its position in Alibaba Group by 195.1% during the second quarter. Duncker Streett & Co. Inc. now owns 605 shares of the specialty retailer’s stock worth $112,000 after buying an additional 400 shares in the last quarter. Stelac Advisory Services LLC purchased a new position in Alibaba Group during the second quarter worth $116,000. Quattro Financial Advisors LLC purchased a new position in Alibaba Group during the first quarter worth $125,000. Clarus Wealth Advisors purchased a new position in Alibaba Group during the second quarter worth $125,000. Finally, American National Bank boosted its holdings in shares of Alibaba Group by 55.8% during the second quarter. American National Bank now owns 796 shares of the specialty retailer’s stock worth $148,000 after purchasing an additional 285 shares during the last quarter. 38.64% of the stock is owned by institutional investors and hedge funds.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others.

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