Alibaba Group Holding Ltd (NYSE:BABA) has seen its share price increase by over 94% so far this year. In its most recent quarter the company continued to show strong revenue growth over 56% from the prior year. In just three years the online company has seen revenues triple while profits have nearly doubled as well.
The stock has a lot of potential especially given its strong growth, and with a price to earnings multiple of 56, it lags behind other big tech stocks that trade in three digits. With large growth opportunities in China and as Alibaba expands its services, the stock could have greater growth opportunities than what could be achieved in North America. On its retail marketplaces in China the company had 466 million active buyers for the year, which is an increase of over 12% from the prior year but still suggests there is a lot more of the market that can be gained in a country with a population of over $1.3 billion people.
However, the company can grow with not just sheer number of users but in the services it offers as well. Alibaba has shown that it is more than just an ecommerce or auction site with a broad array of offerings that it provides its customers with. In its most recent quarter the company saw growth in all its major segments. Alibaba’s ecommerce sales were up 58%, cloud computing nearly doubled with a 96% improvement, and digital media and entertainment was up 30%.
Alibaba’s stock has been taking off but there could still be more upside in the price.
