It is fascinating that even after months of steady declines, Alibaba Group Holding Limited ( NYSE: BABA ) still trades at a price-to-earnings (P/E) ratio of close to 30.
Yet, there are 2 interesting developments to follow. First, the stock doesn't have a significant short interest, and second – institutional investors are slowly stepping away.
See our latest analysis for Alibaba Group Holding
Lack of Short Interest
When we research the companies that experienced substantial declines, we often see high short interests, sometimes well into double-digits.
Yet, we cannot say the same for Alibaba. The stock lost over 65% from the peak, but short interest never went over 3%. Thus, we can conclude that this decline was not speculative but rather due to deteriorating investors' confidence to accept higher valuation.
Tracking the Ownership Change Over the Months
As we periodically track the ownership changes of the stock over the months, here are 3 snapshots from the last few quarters.
1. August 2021
What are the risks and opportunities for Alibaba Group Holding?
Trading at 22.6% below our estimate of its fair value
Earnings are forecast to grow 16.46% per year
Earnings grew by 112.6% over the past year
Large one-off items impacting financial results
Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Stjepan is a writer and an analyst covering equity markets. As a former multi-asset analyst, he prefers to look beyond the surface and uncover ideas that might not be on retail investors' radar. You can find his research all over the internet, including Simply Wall St News, Yahoo Finance, Benzinga, Vincent, and Barron's.
Alibaba Group Holding
Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally.
Flawless balance sheet and undervalued.