Alibaba Group (NYSE:BABA) Shares Down 6.9% – What’s Next?

Shares of Alibaba Group Holding Limited (NYSE:BABA) dropped 6.9% on Thursday. The stock traded as low as $93.42 and last traded at $94.4730. 25,298,123 shares were traded during trading, an increase of 121% from the average daily volume of 11,451,792 shares. The stock had previously closed at $101.52.

Key Alibaba Group News

These are some of the BABA news items that stood out recently:

• Neutral Sentiment: Alibaba is pursuing a Hong Kong listing for its T-Head semiconductor unit. A separate listing could highlight the value of its in-house chip business, but the unit’s prospects are also exposed to chip-policy and geopolitical risks. Alibaba pursues T-Head listing
• Negative Sentiment: Reports say the U.S. Commerce Department is preparing rules that could restrict Chinese AI developers from remotely using advanced Nvidia processors hosted in overseas data centers. That could limit computing capacity for Alibaba’s cloud and AI businesses. Potential U.S. AI chip restrictions
• Negative Sentiment: Coverage has linked Alibaba to Singapore-based Megaspeed International, an Nvidia partner, and reported that financing connections through Singapore and Malaysia units are under scrutiny. The allegations could increase regulatory and reputational risks; the rules’ final scope and any direct impact on Alibaba remain uncertain. Reports on Alibaba and Megaspeed

Wall Street Analyst Weigh In

Several brokerages have commented on BABA. Piper Sandler lowered shares of Alibaba Group to a “hold” rating in a research note on Thursday, October 8th. Citigroup upped their target price on shares of Alibaba Group from $190.00 to $193.00 and gave the company a “buy” rating in a report on Thursday, October 8th. Weiss Ratings upgraded shares of Alibaba Group from a “hold (c-)” rating to a “hold (c)” rating in a report on Friday, October 2nd. Benchmark reaffirmed a “buy” rating on shares of Alibaba Group in a research report on Thursday, August 20th. Finally, Jefferies Financial Group reiterated a “buy” rating and set a $192.00 price target on shares of Alibaba Group in a research note on Thursday, October 8th. Two investment analysts have rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and an average target price of $183.53.

Alibaba Group Stock Down 6.9%

The business has a 50 day moving average of $107.56 and a 200-day moving average of $123.99. The stock has a market cap of $235.03 billion, a PE ratio of 22.87, a P/E/G ratio of 1.31 and a beta of 0.44. The company has a current ratio of 1.36, a quick ratio of 1.36 and a debt-to-equity ratio of 0.21.

Alibaba Group (NYSE:BABA) last issued its quarterly earnings results on Friday, August 14th. The specialty retailer reported $1.26 earnings per share for the quarter, missing analysts’ consensus estimates of $1.94 by ($0.68). Alibaba Group had a return on equity of 4.79% and a net margin of 7.00%. The business had revenue of $39.64 billion for the quarter, compared to analyst estimates of $39.52 billion. During the same quarter in the prior year, the company earned $14.75 EPS. The firm’s revenue for the quarter was up 8.6% on a year-over-year basis. Equities research analysts predict that Alibaba Group Holding Limited will post 5.89 EPS for the current fiscal year.

Insider Activity at Alibaba Group

In other Alibaba Group news, Director Joseph Tsai acquired 720,000 shares of the company’s stock in a transaction that occurred on Monday, August 24th. The shares were purchased at an average price of $14.29 per share, with a total value of $10,288,800.00. Following the completion of the acquisition, the director directly owned 114,979,168 shares of the company’s stock, valued at approximately $1,643,052,310.72. The trade was a 0.63% increase in their position. The acquisition was disclosed in a filing with the SEC, which is available through this hyperlink. Also, CEO Yongming Wu purchased 350,000 shares of the stock in a transaction dated Monday, August 24th. The shares were bought at an average cost of $14.24 per share, for a total transaction of $4,984,000.00. Following the completion of the purchase, the chief executive officer owned 1,364,418 shares in the company, valued at approximately $19,429,312.32. This trade represents a 34.50% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders have sold a total of 999,971 shares of company stock worth $13,563,304 in the last three months. 12.50% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the business. Nykredit A S acquired a new position in shares of Alibaba Group in the second quarter worth $50,417,000. Pale Fire Capital SE acquired a new stake in shares of Alibaba Group during the second quarter valued at $49,810,000. Perseverance Asset Management International increased its position in Alibaba Group by 14,416.0% during the 3rd quarter. Perseverance Asset Management International now owns 493,399 shares of the specialty retailer’s stock worth $53,060,000 after purchasing an additional 490,000 shares in the last quarter. Sei Investments Co. increased its position in Alibaba Group by 63.5% during the 1st quarter. Sei Investments Co. now owns 573,409 shares of the specialty retailer’s stock worth $71,940,000 after purchasing an additional 222,666 shares in the last quarter. Finally, WCM Investment Management LLC raised its stake in Alibaba Group by 347.6% in the 1st quarter. WCM Investment Management LLC now owns 249,736 shares of the specialty retailer’s stock valued at $30,463,000 after purchasing an additional 193,947 shares during the last quarter. 13.47% of the stock is owned by hedge funds and other institutional investors.

About Alibaba Group

Alibaba Group Holding Limited is a technology and commerce company founded in 1999 and headquartered in Hangzhou, China. It operates digital platforms that connect consumers, merchants, businesses and other participants in commerce. Its businesses include China-focused marketplaces such as Taobao and Tmall, international platforms including AliExpress and Alibaba.com, and Alibaba Cloud, which provides cloud computing and related technology services. The group also has operations in areas such as logistics, local services and digital media.