以企業價值/自由現金流觀之，阿里的評價為亞馬遜的1/4不到

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Looking at the more representative enterprise value to free cash flow [EV/FCF] ratio, it becomes apparent that the market is valuing Alibaba much lower than Amazon. The EV/FCF is only 16 times for Alibaba and 72 times for Amazon.

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With a 3-year revenue CAGR and a 5-year revenue CAGR above 40 percent, it's hard to argue Alibaba Group is not a growth stock. Amazon only managed to deliver around 30 percent CAGR for both its 3-year and 5-year revenues. For the last reported quarter, Alibaba scored a 64 percent increase in revenue. Its forward revenue growth of 35.3 percent surpasses that of Amazon as well.

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If the share price does reach $1000, the P/E ratio would be more than 40 times. That would mean a rather rich valuation for Alibaba. However, we have to consider that the formidable headwinds facing the company have resulted in analysts churning out conservative numbers and price targets. As we can see from the following table, the EPS forecast is premised on the revenue growth steadily declining from the 5-year revenue CAGR of 48 percent to the low teens by 2026.

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Second, the Holding Foreign Companies Accountable Act [HFCAA] signed into law on 18 December 2020 could result in BABA ADRs delisted from U.S. stock exchanges if Alibaba is unable to fulfill the conditions as stipulated in the Act. The company CFO, Maggie Wu, has expressed her confidence that Alibaba can comply with the requirements of the HFCAA.

Nevertheless, the U.S. government can issue amendments to the Act as it has done so in March. There is no certainty that Alibaba would be able to meet all future changes to the HFCAA. Investors have to take such risks into consideration.

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What are we missing here? According to the consensus forecast, Alibaba is projected to double its earnings per share to nearly $20 in fiscal year ending March 2026, up from the $10.10 it reported in the fiscal year ending March 2021. Correspondingly, its P/E ratio would compress to a mere 11 times on a forward basis, if the share price stayed stagnant.

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Masayoshi Son, the CEO of SoftBank Group (OTCPK:SFTBY) (OTCPK:SFTBF), recently commented that Alibaba is "a great company, at a low price compared with its fundamentals." As SoftBank is a substantial shareholder of Alibaba, perhaps some readers are not convinced.

However, Alibaba is becoming such a value stock that even "Warren Buffett would love," according to a recent Barron's article. In a selection of high-scoring U.S. stocks from the Validea Buffett model, with market values above $10 billion, Alibaba Group was among the 10 finalists. Of particular note, it received a perfect score based on the Buffett model.

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It is common nowadays to read media headlines and comments about fund managers "dumping BABA stock". Thus, it came as a surprise to me that Alibaba Group Holding was ranked fifth among "50 stocks that matter the most to hedge funds," according to the Goldman Sachs' Hedge Fund VIP List.

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Do note that I am not factoring in any share consolidation in the interim. I am also not considering the scenario that Alibaba becomes a meme stock which is possible since Redditors tend to promote stocks that are "hated" by the market. I am assuming the adage that the stock market is a weighing machine, in the long run, will come to fruition for BABA.

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During times of uncertainty, it is imperative that companies have plenty of liquidity. Alibaba has loads of cash. Its EV to net cash is at a low 11.5 times compared to 36.6 times for Amazon. In other words, Alibaba has much more cash at its disposal relative to Amazon when we compare the enterprise values of the two companies. With the financial heft to withstand regulatory changes and geopolitical headwinds, it seems BABA shares are now at a bargain.

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https://seekingalpha.com/article ... baba-stock-hit-1000