Alibaba Group reported a significant 31% drop in its profit contribution from Ant Group for the fourth quarter of 2024, equating to approximately RMB 1.76 billion ($243 million). This decline is a result of strategic growth investments by Ant Group, which have overshadowed the benefits realized from asset valuations.
Financial analysts are cautiously optimistic about Alibaba’s future, with an average price target set at $161.06 for the next year, reflecting a potential upside of 20.15% from the current stock price of $134.05. The estimates from 38 analysts vary, with a high projection of $193.10 and a low of $102.44.
Furthermore, recommendations from 43 brokerage firms indicate a consensus rating of 1.7 for Alibaba, classified as “Outperform” on a scale where 1 is a Strong Buy and 5 is a Sell.
In terms of valuation, GuruFocus estimates the GF Value for Alibaba at $110.22, which indicates a potential downside of 17.78% from the current trading price. This evaluation takes into account historical trading multiples, past business growth, and future performance predictions.
Despite the current setbacks, Alibaba’s focus on strategic growth through Ant Group suggests a long-term vision, aimed at enhancing its market position and overall business resilience. Investors may find these calculated risks beneficial for future growth.