BABA: Disappointing Stimulus, Slower Growth, And Geopolitical Tensions Making The Stock Cheap

Summary:

• Alibaba is undervalued, with geopolitical concerns and a slowdown in their core TTG segment justifying some discounting; a Buy rating is warranted.
• Management is actively investing in the business and repurchasing shares, with a focus on improving user experience and maintaining market share leadership.
• Despite challenges, BABA’s cloud segment showed impressive growth in Adj. EBITA, and their diversified investments are expected to yield long-term benefits.
• Risks include debt for share repurchases, declining FCF, competitive pressures, and geopolitical uncertainty, but the current valuation offers a compelling risk-reward ratio.

Alibaba (NYSE:BABA) is a company that is significantly undervalued, and some of this discounting is warranted due to geopolitical concerns and a slowdown in their core TTG segment. However, management is actively investing in their business and repurchasing shares

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA either through stock ownership, options, or other derivatives. 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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