Today, Alibaba Holding Limited ($BABA) is up nearly 4 percent in premarket trading. BABA was trading at $130.88 as of 7:11 a.m. ET, up 3.36 percent or $4.25 from the previous day.
On the last trading day, its price value increased by 4.5 percent, or $5.47. Its market capitalization was $343.2 billion, based on 31,057,102 shares.
However, the stock is still trading below its 50-day and 200-day moving averages.
Why is Alibaba stock rising?
First, Benchmark paid Alibaba a backhanded compliment the day before.
On the one hand, the banker reduced its price target for Alibaba stock by $10 to $235 per share. On the other hand, you may have noticed that Alibaba stock is currently trading for less than $127 per share. As a result, the price target implies that the stock price will double in a year.
Second, Chinese government crackdowns could benefit companies like Alibaba; according to Stonehorn Global Partners’ Sam Le Cornu, his firm is increasing its stake in the Chinese tech behemoth.
“We’re increasing our position in Alibaba,” Le Cornu, CEO, and co-founder at the investment management firm told CNBC’s “Street Signs Asia” on Thursday. “Based on valuations and the earnings outlook, we see that it’s a buying opportunity.”
Alibaba currently anticipates $39.9 billion in quarterly sales in Q3. Analysts predict per-American depositary receipt profits of $2.71, which are already down 19 percent year over year, and that figure could be lower if sales volumes fall.
Analysts expect Alibaba Group Holding Ltd’s 12-month price to be 195.30, with a high estimate of 294.31 and a low estimate of 139.89. The median estimate is a +54.23 percent increase over the previous price of 126.63.
Is Alibaba a strong buy?
BABA has a Strong Buy Consensus rating on TipRanks, with 21 Buys and 2 Holds. However, TipRanks’ Smart Score rating system gives Alibaba stock a 6 out of 10, indicating its performance is in line with market averages.
The average Alibaba price target of $213.50 implies a potential upside of 67.4 percent from current levels.