Alibaba (NYSE: BABA) Stock's Biggest Strength That No One Talks About

Alibaba Group Holding Ltd. (NYSE: BABA) stock has hit the ground running since its IPO. At today's (Tuesday's) opening price, it's up 69% from its offer price of $68.

Demand for Alibaba shares has been high. BABA has averaged 34 million shares traded per day since its debut.

BABA stockAnd yet, most investors still aren't aware of Alibaba's greatest strength.

Money Morning has covered Alibaba stock and the massive IPO for over a year. We've gone into great detail about Alibaba's core businesses, strong financials, and growing market.

These factors have fueled BABA stock's initial run and will remain catalysts for years.

But there's another part of Alibaba's business that few outlets have covered. It may not have received much attention from Wall Street, but Money Morning Special Contributor Michael Lewitt describes it as Alibaba's biggest strength...

BABA Stock: Another Catalyst Emerges

One of the biggest things that separates Alibaba from competitors is how it handles its logistics.

"In sharp contrast to a company like Amazon, Alibaba outsources fulfillment and logistics to its 48%-owned affiliate China Smart Logistics Network," Lewitt said. "That enables it to keep billions of dollars of costs off its balance sheet and income statement."

Alibaba's biggest sites, Taobao and Tmall, have an incredible market share. Without the China Smart Logistics Network in its portfolio, Alibaba's costs would be enormous.

"Taobao has over 95% market share in the consumer e-commerce sector in China while Tmall has 57% of the business e-commerce sector," Lewitt said. "With a combined 81% market share in overall e-commerce gross merchandise volume, Alibaba is by far the dominant player in Chinese e-commerce."

If you want to see the impact these costs can have, just take a look at Amazon.com Inc. (Nasdaq: AMZN).

"If Amazon didn't include its logistics costs in its income statement, it would be much more profitable," Lewitt said.

Last quarter, Amazon had an earnings per share (EPS) loss of $0.95, despite reporting revenue of $20.58 billion. In fact, Amazon hasn't turned a profit since 2012.

Now, not all of Amazon's costs are logistics. The company does spend a great deal expanding its business. Still, AMZN reported an income loss from operations of $412 million in Q3 - even with revenue over $20 billion.

Conversely, Alibaba had income from operations of $708 million. That was with revenue of $2.74 billion.

While this is already a major strength for BABA stock, Lewitt believes it's about to become even more important...

What to Expect from BABA Stock Now

"What makes this all so incredible is that the Internet and e-commerce are still in their early stages in China," Lewitt said. "It's virtually all upside."

Right now, only 44% of Chinese citizens are on the Internet. When it comes to retail sales, only 8% take place online in China. Alibaba's command of the market ensures the company grows along with the market.

Lewitt also points out that Alibaba has not yet perfected the monetization of its business.

"The overall monetization rate for Alibaba's China retail marketplace was only 2.55% in its 2014 fiscal year," Lewitt said. "The monetization rate from mobile phones has been improving to 1.49% in the most recent quarter from 0.98% and 0.58% in the two previous quarters, which are considered relatively low rates that should offer significant upside.

"Over such a large base, even small increases in monetization rates could boost earnings significantly," he continued.

Lewitt isn't the only Money Morning expert who's bullish on the BABA stock price.

"I think Alibaba is going to see $3 per share in earnings next year or roughly double the $1.45 analysts now expect on average," Money Morning's Chief Investment Strategist Keith Fitz-Gerald said.

"I love Alibaba and I love what they stand for," Fitz-Gerald said on one of his regular appearance on FOX Business. "I've recommended Alibaba stock for a long time. I think the stock has a long way to go from here, and the company is going to rewrite the Internet."

So how high is the BABA stock price headed? According to Money Morning's Capital Wave Strategist Shah Gilani, there's no telling.

"I don't know that there is a ceiling for Alibaba. I think over time this is just one of those stocks you have to hold onto," Gilani said on FOX Business.

More from Michael Lewitt: Since its IPO, Alibaba stock has been traded at an incredible rate. And while the case for BABA grows stronger, this American icon continues to falter. As you add Alibaba shares, it's time to shed this American stock...