Key Points
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Alibaba’s stock has declined over 60% from its all-time high.
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The company faces significant macroeconomic, competitive, and regulatory challenges.
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Analysts believe it could be undervalued if it navigates these challenges successfully.
Alibaba Group (NYSE: BABA), the largest e-commerce and cloud infrastructure company in China, saw its stock price fall from a record high of $310.29 in October 2020 to around $120 today, primarily due to a record fine from Chinese regulators and intensified competition. Alibaba’s revenue and adjusted earnings growth have slowed significantly, with projections of only 5% compound annual growth rate (CAGR) from fiscal 2022 to 2025.
In fiscal 2025, Alibaba’s revenue rose by 6%, while adjusted earnings per share increased by 5%. Despite a challenging landscape, the company is stabilizing, with an 11% projected growth in earnings per share from fiscal 2025 to 2028. Analysts highlight growth from overseas markets and enhanced logistics as key drivers, as Alibaba continues to adapt through potential spinoffs of its cloud and logistics divisions.
