![]() BABA's Q2 FY 2022 bottom line was -10% below the sell-side's consensus earnings per ADS forecast of RMB12.44. There are two major factors that are likely responsible for the drop in Alibaba's stock price in November 2021.įirstly, BABA's Q2 FY 2022 (YE March 31) earnings, released on Novembefore trading hours, were a huge disappointment.Īlibaba's non-GAAP earnings per ADS (American Depositary Share) decreased by -38% YoY from RMB17.97 in the second quarter of fiscal 2021 to RMB11.20 in Q2 FY 2022. In the subsequent section, I explore possible reasons that could explain why Alibaba's stock dropped in November 2021. The Hang Seng index decreased by -6% in November, while the S&P 500 and the Nasdaq Composite edged up by +1% and +2%, respectively in the previous month. BABA's shares didn't do as well as the broader market again in the last month. November 2021 was another month to forget for Alibaba's shareholders, as the company's share price fell by -23% from $164.94 as of Octoto $127.53 as of November 30, 2021. ![]() Alibaba's Year-to-date Share Price Performance Alibaba's shares have underperformed both the US and Hong Kong market indices in 2021. During this same period, both the Nasdaq Composite and the S&P 500 rose by more than +20%, and the Hong Kong benchmark Hang Seng Index (BABA has a secondary listing in Hong Kong) declined by -14%. BABA Stock PriceīABA's stock price has dropped by -45% year-to-date in 2021 as per the chart below. I am not optimistic that BABA's shares can stage a strong rebound in the near term, which justifies my Neutral investment call for the stock. ![]() These factors have led to a sharp decline in Alibaba's stock price in November 2021, and a de-rating of its valuations. But the company's growth prospects are not as good as they were in the past, and it is facing significant regulatory scrutiny as well. I have a Hold or Neutral investment rating for Alibaba Group Holding Limited's ( NYSE: BABA) shares.Īlibaba is now valued by the market at a low-teens forward P/E multiple, which seems cheap. David Becker/Getty Images News Elevator Pitch
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