Legendary Chinese executive Jack Ma stepped down as the executive chair of Alibaba Group Holding Ltd. (NASDAQ: BABA) in Fall of 2019, but the retail juggernaut is still going strong, even in the midst of a pandemic.
When he left, investors wondered what would be next for Alibaba stock.
While it fell 5% in the immediate aftermath of the announcement that Jack Ma was leaving, sending shares to a record low for the year, the company has still seen a 38% increase in revenue from last year.
The unknowns regarding the global economy are definitely present, but it is no time to run from Alibaba stocks.
In fact, Alibaba stock prices may still be a bargain making it a great time to invest.
Alibaba's Extraordinary Profits Aren't Going Anywhere
Alibaba started as a small online shop in Hangzhou about 20 years ago. It's now China's top online retailer. In Q3 of fiscal 2020, they reported $23.2 billion in revenue.
BABA underwent an initial public offering in the United States in 2014. Since then, the Alibaba stock price has risen because highly impressive sales increases and its market dominance in China.
Between Ma's departure and coronavirus, Alibaba still remains a worthwhile investment.
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What Makes Alibaba Stocks a Bargain?
Despite the changes over the past year, Alibaba remains a thriving, growing company.
They have expected profit growth of 28.3% this year, and 22.6% in 2021. With Alibaba stocks trading at a forward price-to-earnings (P/E) ratio of 25.1 and projected growth to continue, Alibaba stocks are still considered a bargain.
And, Alibaba stocks continues to trade within 5% of its all-time high.
Despite a decline in early 2020 from fears of trade wars and the pandemic, it is expected to bounce back as China recovers from coronavirus threats.
Investors willing to take a long-term approach should certainly keep Alibaba in the forefront of their minds.
Why Alibaba Stock Prices Could See a Rise
Coronavirus is causing crises across the globe, and while circumstances feel quite dire, they will resolve...just as China is starting to see as the virus begins to subside.
There were big predictions for China's stocks in early 2020, which didn't happen, but as the rest of the world is reeling, China is slowly coming back.
That means there could be big things coming later in 2020 for China and Alibaba stocks.
Why? A big part is that Alibaba is a master at online retail sales. Even though other retail sales dropped, online sales had only a slight downturn through January and February.
And when it comes to Alibaba's cloud computing, there's actually been an increase in demand with so many organizations suddenly having to move services and work online. With unknowns around how long services will need to remain primarily online, Alibaba's cloud services should continue to see a boost.
Alibaba's immense consumer base is why the company remains one of Money Morning Executive Editor Bill Patalon's top stock picks. Bill first told investors that the company's stock was a strong buy in January 2016, when the company was trading for only $69.
Today, with Alibaba trading for $199.44, Bill continues to call the company a strong buy.
Wall Street analysts placed a high price target on Alibaba stocks for 2020, which may not be reached following coronavirus, but expectations remain positive for the remainder of the year.
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