Skip to main content

Market Overview

MKM: Alibaba Has The Best Fundamentals Of Any Mega-Cap Stock

Share:
MKM: Alibaba Has The Best Fundamentals Of Any Mega-Cap Stock

MKM Partners raised its price target for Alibaba Group Holding Ltd (NYSE: BABA) by $43 Wednesday, predicting the company’s commerce will grow by 50 percent this year.

Rob Sanderson, managing director at MKM, maintained a Buy on the stock.

The price target increase is driven by “50 percent organic growth in the segment, strong secular trends, dominant market position and [a] 60-percent margin while funding significant investments,” Sanderson said in a note.

Alibaba is MKM’s top pick in Internet mega-caps and has the best fundamentals in the group, the analyst said.

The Chinese e-commerce giant reported a first-quarter adjusted EPS of $1.17 against a 93-cent estimate on Aug. 17 and sales of $7.403 billion versus a $7.13 billion estimate.

The company reported 466 million annual active consumers and 529 million mobile monthly active users, up 22 million year-over-year.

Why Alibaba Is The Best Mega-Cap Internet Name

Alibaba’s fundamentals are the best in sector, according to MKM. The research firm named six of them:

  • End markets with higher growth and evident acceleration.
  • Monetization improvement driven by traffic growth and personalization.
  • The opportunity to build ad load at management’s discretion to drive continued top-line expansion.
  • Cloud is in an earlier stage in China, and the dominance of Alibaba’s subsidiary Alicloud “may be less contested than” Amazon.com, Inc. (NASDAQ: AMZN)’s AWS is in the west, Sanderson said. Alicloud has crossed the 1-million mark in paying customers and has more market share than its next seven competitors combined, according to MKM.
  • E-commerce adoption in southeast Asia is “accelerating and just beginning.”
  • Alibaba’s commerce segment margin is 60 percent, even as major investments —such as in rural China, a $1-billion stake increase in Lazada and the expansion of Tmall — are absorbed.

Related Links:

This ETF Is Loving Alibaba's Meteroric Rise 

Improvements Continue At Alibaba; Keybanc Raises Price Target

Image Credit: Rico Shen, via Wikimedia Commons

Latest Ratings for BABA

DateFirmActionFromTo
Feb 2021CitigroupMaintainsBuy
Feb 2021HSBCMaintainsBuy
Feb 2021MacquarieMaintainsOutperform

View More Analyst Ratings for BABA
View the Latest Analyst Ratings

 

Related Articles (BABA)

View Comments and Join the Discussion!

Posted-In: Alibaba Group Holding Ltd Amazon.com Inc.Analyst Color Price Target Top Stories Analyst Ratings Tech Best of Benzinga

Latest Ratings

StockFirmActionPT
FSRMorgan StanleyMaintains40.0
NATJefferiesMaintains2.8
MEDDA DavidsonMaintains302.0
VICRBWS FinancialMaintains120.0
PSXMizuhoMaintains96.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com