Robert Way
My Thesis
Alibaba Group (NYSE:BABA), one of the biggest Chinese and international e-commerce platforms, faces challenges from increased competition, political pressures, and macroeconomic softness, contributing to its underperformance in recent years. The stock is now trading more than 78% off its 2020 highs:
I believe this decline – its scale in particular – can no longer be explained by the company’s weak fundamentals, which are likely to continue to reverse after the COVID crisis. I’m taking a risk when I write this, but the BABA stock looks like a classic contrarian ‘Buy’ as it has a pretty comfortable margin of safety and growth prospects from its developed projects.
My Reasoning
First off, let me jump right to the recent financials of Alibaba.
The company’s fiscal 2Q FY2024 results revealed a 9% YoY increase in revenue to RMB 224.7 billion. That translated to ~$30.8 billion (+6% YoY), falling short…
