2024-06-14 07:34:35 ET
Summary
- I have been skeptical of buys on Alibaba. It looks like this view has been accurate so far; since my last update, BABA has lagged the SPY by 12.13%.
- Revenue growth is still lackluster, particularly in the most relevant segment of China Commerce, due to a reduction in take rates and customers' preferences for lower-priced items.
- I had mentioned margin expansion upside as a key upside risk in my last update. But this is not playing out so far, except in the Cloud Business.
- Valuations, of course, continue to be low, but I believe this is insufficient as I require a strong sales rebound catalyst to justify fresh buys.
- Major investors continue to be bullish on Alibaba, including David Tepper's fund, which now has the stock as its largest holding. But I prefer to not fight the bearish trend until it starts to turn.
Performance Assessment
Performance Since Author's Last Update on BABA (Author's Last Article on Alibaba, Seeking Alpha)
Read the full article on Seeking Alpha
For further details see:
Alibaba: Nothing Has Changed To Make Buys Compelling