Home / Features / Chinese Stocks under Stressful Valuation: Alibaba Group Holding (NYSE:BABA), Vipshop Holdings (NYSE:VIPS)

Chinese Stocks under Stressful Valuation: Alibaba Group Holding (NYSE:BABA), Vipshop Holdings (NYSE:VIPS)

Alibaba Group Holding Limited (NYSE:BABA) runs in leading trade, it plummeting -1.25% to traded at $95.65. BABA attains analyst recommendation of 1.80 on scale of 1-5 with week’s performance of -1.56%. In addition to the strategic cooperation contract inked with Alibaba Group Holding Limited’s (BABA) logistics arm Cainiao Network Technology Co., Ltd. previous year, Baotong will additional deepen its relationship with Cainiao by providing best-in-class services to a wider variety of merchants through Cainiao’s platform.

JPMorgan Chase & Co. restated a “buy” rating and issued a $96.00 target price on shares of BABA. HSBC restated a “buy” rating and issued a $113.00 target price on shares of Alibaba Group Holding in a report on Saturday, June 4th. RBC Capital Markets restated an “outperform” rating and issued a $105.00 target price on Thursday, August 11th.

To find out the technical position of BABA, it holds price to book ratio of 7.16 that unearth high-growth companies selling at low-growth prices, but it requires appropriate measurement approach. It has forward price to earnings ratio of 22.65, and price to earnings ratio calculated as 22.81. The price to earnings growth ration calculated as 5.55. BABA is presenting price to cash flow of 13.58.

EPS estimates indicating constrictive facts, the current year from sell-side analysts, Price to current year EPS stands at 188.80%, and looking further price to next year’s EPS is 27.62%. While take a short look on price to sales ratio, that was 15.53 and price to earning ration of 22.81 attracting passive investors.

Vipshop Holdings Limited (NYSE:VIPS) kept active in under and overvalue discussion, VIPS holds price to book ratio of 14.49 that presents much better indicator to find market price of a share price over its book value of equity for investment valuation. In addition, the firm has price to earnings ratio of 36.82, which is authentic method to judge but not universal for all situation.

Fundament/ News Factor in Focus

Taking look on ratio analysis, VIPS has forward price to earnings ratio of 17.22, compare to its price to earnings ratio of 36.82. Adding one more ration to find detail valuation of security, price to earnings growth ration that stands at 9.69. The co is presenting price to cash flow as 14, the low single digit may indicate stock is undervalued and vise versa. On other hand, keeping in mind stable cash flows but few growth prospects make traders to value lower.

The firm has price volatility of 5.35% for a week and 4.12% for a month. Its beta stands at 1.77 times. Narrow down four to firm performance, its weekly performance was -3.19% and monthly performance was 14.73%.

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