BABA - Embedded Expectations Analysis - 2019 09 20
Alibaba Group Holding Limited (BABA:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 28.5x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management may be concerned about their original content, market positioning, and operating efficiency.Specifically, management may lack confidence in their ability to deliver into less developed areas and invest in original content production. Furthermore, they may be concerned about the sustainability of recent revenue growth and of Chinese commerce retail business growth. Additionally, they may lack confidence in their ability to sustain recent customer management revenue growth, and they may be exaggerating the value of their positioning in the Chinese market. Finally, management may be concerned about the sustainability of the speed of digitization in the Chinese market, and they may lack confidence in their ability to improve their operating efficiency.
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