Should you buy Alibaba stock? (June 2024)

Published first at https://www.3minutebreakdowns.com Alibaba stock analysis. Ticker: $BABA Over the last two years, Alibaba stock has essentially gone nowhere, that’s despite it being one of the cheapest stocks around. The company has a current market value of 198 billion US dollars. But it’s also got 34 billion of cash on its balance sheet and 75 billion of investments. Subtract 24 billion of debt and the enterprise value comes to 112 billion. Considering Alibaba has reported 22 billion of free cash flow over the last 12 months and almost 27 billion of ebitda, the stock is valued at only 5 times free cash flow and the enterprise value to ebitda ratio is even lower. That valuation has sparked interest from a number of high profile investors. Filings indicate that David Tepper, Michael Burry and Howard Marks all own the stock. But it’s worth understanding why Alibaba stock is so cheap in the first place. As noted in my previous video, Alibaba’s variable interest entity structure holds certain risks to investors such as not providing direct ownership of the company. The grey legal area surrounding the VIE structure is enough to put some investors off entirely. Combine that with geopolitical tensions and a heavy handed Chinese Communist Party and it’s easy to see why markets punished the stock. #alibabastock #investing #stocks #3mb