Alibaba Q1: Bulls Underestimated The Headwinds Ahead

Summary:

  • I see very mixed results for Alibaba Group Holding Limited’s FY Q1 earnings.
  • Margin pressures and growth uncertainties are among the top of my concerns.
  • The Alibaba bulls are drastically underestimating these headwinds and overstating the attractiveness of its low P/E.
  • Adjusted for growth, the PEG ratio is far above the 1x threshold, even under generous assumptions.

Headwinds

DNY59

BABA Stock: Previous Thesis and Q1 Recap

My last article on Alibaba Group Holding Limited (NYSE:BABA) argued for a hold rating on the stock. That article was entitled “Alibaba: I Keep Disagreeing with The Crowd” and was published


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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