Here's Why Alibaba (BABA) Stock Closed Higher Today
NEW YORK (TheStreet) -- Alibaba (BABA) - Get Report stock climbed by 3.23% to $78.30 on Monday, as China-based U.S. traded stocks benefited from a rally in Chinese markets.
Based in Hangzhou, China, Alibaba is principally engaged in online and mobile commerce through products, services and technology.
After trading lower most of today, the Shanghai Composite Index rallied within the last 40 minutes of trading to close up by 0.7% to $3,606.96, Bloomberg reports.
Investors suspect that state-linked funds bought shares in late trading, after the central bank tightened margin financing requirements this past weekend, Bloomberg adds.
Expectations that the yuan will be added to the basket of official reserve currencies this month might have boosted the market as well, Reuters reports.
The market could experience volatility in coming weeks amid geopolitical threats.
"Terror in Paris heralds further global uncertainties," wrote Hong Hao, managing director and chief China strategist at BOCOM International, according to Reuters.
Separately, TheStreet Ratings team rates ALIBABA GROUP HLDG as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate ALIBABA GROUP HLDG (BABA) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BABA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.37%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- ALIBABA GROUP HLDG reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($16.76 versus $1.59).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 571.9% when compared to the same quarter one year prior, rising from $514.69 million to $3,458.36 million.
- Although BABA's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average.
- The gross profit margin for ALIBABA GROUP HLDG is currently very high, coming in at 71.73%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 101.46% significantly outperformed against the industry average.
- You can view the full analysis from the report here: BABA
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.