Invezz·2024-07-10 07:30Core Insights - Alibaba's stock has significantly underperformed in 2023, dropping over 1.50% while major indices like Nasdaq 100 and S&P 500 have risen by double digits [1] - The company's stock value has decreased by over 54% since October 2020, indicating a substantial decline in investor confidence [1] Financial Performance - Alibaba's annual revenue increased from over $71.9 billion in 2020 to more than $130 billion in 2023 [2] - The company's free cash flow is projected to exceed $20 billion in 2024, resulting in a price-to-free cash flow ratio of 9.15, highlighting its undervaluation compared to peers [2] - The forward P/E ratio stands at 12.80, lower than the sector median of 16 and significantly below its five-year average of 24 [2] Strategic Initiatives - Alibaba is implementing a workforce reduction, cutting an additional 20,000 jobs to enhance efficiency and reduce costs amid intense competition [2] - The company has announced a stock repurchase program worth over $25 billion, aimed at boosting shareholder returns and increasing the value of remaining shares [2] Market Challenges - Alibaba's cloud computing division reported over $3.5 billion in revenue, reflecting only a 3% increase, while competitors like AWS and Azure are experiencing double-digit growth [3] - The company holds a mere 4% market share in the cloud sector, facing stiff competition from Tencent Cloud and global leaders [3] Technical Analysis - The stock price has remained within a tight range, dropping below key Fibonacci retracement levels and moving averages [4] - A triangle pattern is forming, indicating potential breakout opportunities as it approaches a confluence level [4] - The accumulation/distribution indicator shows a bullish divergence pattern, although trading volume has decreased [5]