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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Alibaba Group Holding Limited (NYSE:BABA) due to its excellent fundamentals in more than one area. BABA is a company with strong financial health as well as a buoyant growth outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on Alibaba Group Holding here.
Flawless balance sheet with high growth potential
Bullish market analysts are forecasting fast-growing BABA to deliver an exceptional sales growth rate of 75% over the next year. This underlies the notable 20% return on equity over the next few years leading up to 2022. BABA’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that BABA manages its cash and cost levels well, which is a key determinant of the company’s health. BABA’s has produced operating cash levels of 1.12x total debt over the past year, which implies that BABA’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Alibaba Group Holding, there are three relevant factors you should look at:
- Historical Performance: What has BABA’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is BABA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BABA is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BABA? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.