Stocks Analysis by Investing.com (Francesco Casarella) covering: Alibaba Group Holdings Ltd ADR, PayPal Holdings Inc. Read Investing.com (Francesco Casarella)'s latest article on Investing.com
Both stocks have been hit hard, still down 70-80% from their all-time highs following the 2022 bear market.These two stocks, heavily impacted by the 2022 bear market that followed the meme stock frenzy of 2021, are still down a staggering 70-80% from their all-time highs.
Despite these concerns, Alibaba boasts a strong balance sheet. The company's liquid assets and short-term investments can comfortably cover its current debt, and its current assets outweigh current liabilities.While the stock appears undervalued, the political risk factor remains a major concern for me. Given this uncertainty, I wouldn't personally include Alibaba in my portfolio, even though it has potential for recovery at its current valuation.
Additionally, the market seems to be pricing the stock as if future cash flow growth will be nearly stagnant, which may not be the case.Recent data shows that revenues and EPS are beginning to recover from the 2022 decline. The stock's free cash flow return now exceeds 10%, an attractive figure supported by an ambitious buyback plan averaging $5 billion per year.
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