Alibaba: How Low Will the Stock Go?

Tracey Ryniec and David Bartosiak, Stock Strategists at Zacks Investment Research, discuss Alibaba’s (BABA) stock which has plunged below its 2014 IPO price.

Alibaba Group Holding Limited was the largest IPO in history and expectations ran high. Shares initially soared but have now slid 43% year to date. The company has disappointed investors with four earnings misses in a row. Investors are also jittery over weakness in the Chinese economy extending to Alibaba’s business.

Even though earnings are still expected to rise 23% this year and 36% next year, analysts have started cutting earnings estimates for both years.

Despite the shares falling, Alibaba isn’t cheap. It still trades with a forward P/E of 34. It’s a Zacks Rank #3 (Hold).

How far will shares fall? Are they a deal here?

Watch our short video below as Tracey and David debate whether or not investors should buy the shares here.


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