Why Fundamental Investors Might Love Alibaba Group Holding Limited (NYSE:BABA)

Alibaba Group Holding Limited (NYSE:BABA) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of BABA, it is a company with robust financial health as well as a excellent growth outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Alibaba Group Holding here.

Flawless balance sheet with high growth potential

One reason why investors are attracted to BABA is its notable earnings growth potential in the near future of 25%. The optimistic bottom-line growth is supported by an outstanding revenue growth of 93% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. BABA’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that BABA manages its cash and cost levels well, which is a crucial insight into the health of the company. BABA’s has produced operating cash levels of 0.99x total debt over the past year, which implies that BABA’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

NYSE:BABA Future Profit January 17th 19

Next Steps:

For Alibaba Group Holding, there are three essential factors you should look at:

1. Historical Performance: What has BABA’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Valuation: What is BABA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BABA is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BABA? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.