Alibaba Group Holding Limited (BER:2RR) is expected to report earnings in the course of this week. So, what could potentially happen with Alibaba stock when the earnings are finally out?
To understand what might happen, we have to analyse how the stock has been performing recently in the market. And also, take a look at some of the earnings estimates from Wall Street’s analysts.
Alibaba stock technical analysis
Alibaba stock has actually lost about 54% over the past year. Also, the stock has declined 44%, 37% and 27% over the last Nine, Six and Three months, respectively. So, the stock basically seems to be losing its value as the month progresses, and it hasn’t actually rebounded yet. In fact, the trend lines clearly show that the stock is in a consistent negative trend, both in the short term and long term.
However, the stock has lost a lot of its value mainly due to some regulatory pressures from China. And as many analysts and investors eagerly wait to see what’s going to happen this quarter, we wouldn’t be surprised if Alibaba stock actually continued to fall even more. This is because the slightest miss in earnings estimates will no doubt bring the stock prices further down.
Despite the huge pressure from The Chinese Communist Party (CCP), Alibaba is trying its best to keep afloat. For instance, when the company issued about a billion ADRs, people thought that Alibaba was actually diluting its shares.
However, that wasn’t the case; they were just issuing U.S stock in order to replace some of their Chinese stock with the U.S counterparts in order to be able to sell in the U.S.
Analyst’s expectations about the stock
About 50 analysts offered their 12-month price forecasts for Alibaba stock, and out of these 50 forecasts; no estimate is below $140. The highest estimate was about $295, and the lowest was about $140. Currently, the stock is trading at $126.24. This indicates that the stock still has huge room for growth despite facing cheap bureaucracy and politics from Chinese regulators.
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