1 Growth Stock Down 63% to Buy Right Now

Core Viewpoint - Alibaba remains a significant player in China's economy despite facing challenges, with potential for recovery and growth in its core businesses [1] Group 1: Overcoming Challenges - Alibaba faced a $2.75 billion fine from antitrust regulators in 2021, which restricted its e-commerce operations and allowed competitors like PDD and JD.com to gain market share [2] - The company struggled with a deteriorating macro environment due to the pandemic and strict "zero-COVID" policies, impacting its growth [2] - Recent regulatory setbacks have been fully addressed, and new stimulus measures from the Chinese government are expected to stabilize the economy, allowing Alibaba's core businesses to recover [3] Group 2: Growth Acceleration and Stabilization - Revenue growth decelerated in fiscal years 2022 and 2023 but accelerated again in fiscal 2024 [4] - Revenue growth rates were 41% in FY 2021, 19% in FY 2022, 2% in FY 2023, and 8% in FY 2024, while adjusted net income growth was 30%, -21%, 4%, and 11% respectively [5] - Growth was driven by overseas e-commerce marketplaces and the evolution of the Cainiao logistics unit, which began serving third-party customers [5] Group 3: Cash Generation - Despite cooling top-line growth, Alibaba returned $12.5 billion to investors through share buybacks and initiated a cash dividend of $1 per ADS, along with a special dividend of $0.66 per ADS [7] - The forward yield of 1.8% and a low payout ratio of 51% suggest potential for future dividend increases [7] Group 4: Valuation and Growth Potential - Alibaba's stock is considered undervalued at 15 times next year's earnings, with potential for growth if China's stimulus measures effectively boost the economy [8] - The company is viewed as a worthwhile investment again after a challenging period, with expectations for stock price appreciation as challenges diminish [8]