Alibaba Stock Looks Undervalued At $80 Per Share

Alibaba stock has declined by close to 11% this year to date, as an anticipated rebound in consumer spending in China following the big Covid-19 unlock earlier this year hasn't been as strong as anticipated. While China's GDP grew by 4.5% in the first quarter, Alibaba reported that its domestic e-commerce business saw sales decline by 3% over the most recent quarter as sales of the company's flagship Taobao and Tmall operations remained lackluster. Retail sales in China were also up by 18.4% in April and this could have a positive impact on Alibaba. Alibaba's valuation looks compelling. At its current market price of under $80 per share, Alibaba trades at just about 9x 2024 earnings. We estimate Alibaba's valuation at about $135 per share indicating a considerable upside over the market price. See our analysis of Alibaba revenues for more details on how Alibaba's revenues are likely to trend.