BABA IS FINALLY TRADING AT MY FAIR VALUE!
$Alibaba(BABA)$ PRICE TARGET: $192
POTENTIAL UPSIDE: +8% ✅
"Alibaba remains a decent opportunity considering the accelerating growth of Cloud business but part of the upside is clearly gone"
ASSUMPTIONS:
LTM Revenue: $138.995B
(𝘢𝘴𝘴𝘶𝘮𝘪𝘯𝘨 𝘜𝘚𝘋/𝘊𝘕𝘠 = 𝟩.𝟤𝟢)
5Y Revenue CAGR: 9%
2030 Profit Margin: 17%
2030 PE Ratio: 18
Shares outstanding: 2.393B
Shares reduction: 2%/year
VALUATION:
Q2 2030 $BABA SHARE PRICE =
138.995 * (1.09)^5 * 0.17 * 18 /
[2.393 * (0.98)^5] = $303
You can now choose the discount rate that you prefer, for Alibaba I want to use 12%
ACTUAL PRICE: $177
FAIR VALUE: $172
PRICE TARGET (1Y): $192
POTENTIAL UPSIDE: 8%
EXPECTED RETURNS: 11.4%/year
DIVIDEND YIELD: 0.6%
Are you selling your BABA shares?
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
