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Alibaba's Price Target Raised Over 16% by Pacific Crest

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Alibaba Group Holding Limited’s (BABA - Free Report) price target was recently raised by more than 16% to $160 from $137 by investment firm Pacific Crest.

Reasons Supporting the Upgrade

China's biggest e-commerce company recently held its two-day Investor Conference in Hangzhou, China. Alibaba provided strong sales growth outlook that was well above analyst projections.The company expects revenue growth in 2018 to be in the range of 45– 49%, far above analyst estimates of 37%.

Pacific Crest’s analyst Hans Chung remains encouraged by the strong sales guidance provided by the company.

Management believes that the ongoing strength in its core e-commerce business, increased user growth and healthy spending by Chinese consumers will drive revenues. Also, increasing investments and new initiatives will expand revenues going forward.

He is also positive about the other announcements made at the conference. He believes that Alibaba will further diversify its business beyond e-commerce. Additionally, technology initiatives including investments in Cloud, media and marketing will continue to expand the company’s revenue base in the years to come.

Chung said he has “more confidence that Alibaba can continue to grow its core commerce monetization over the long term."

Stock Performance Overview

Since the company reported fourth-quarter earnings on May 18, its share price has risen 14.7%.

Also, in the last one year, shares of Alibaba have outperformed the broader Zacks Electronic Commerce industry. While the stock registered a positive return of 84.4%, the industry returned 53.4%.

This outperformance can largely be attributed to the company’s near monopoly in the Chinese e-commerce market, growing cloud computing services and strengthening efforts toward diversifying its business beyond it.

Zacks Rank & Stocks to Consider

Currently, Alibaba has a Zacks Rank #3 (Hold). Other better-ranked stocks in the industry are Autobytel Inc. , Mercadolibre, Inc. (MELI - Free Report) and PetMed Express, Inc. (PETS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Autobytel Inc. delivered a positive earnings surprise of 41.98%, on average, in the trailing four quarters.

Mercadolibre, Inc. delivered a positive earnings surprise of 26.74%, on average, in the trailing four quarters.

PetMed Express, Inc. delivered a positive earnings surprise of 9.32%, on average, in the trailing four quarters.

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