The expansion spree by Alibaba Group Holding Ltd (NYSE:BABA) is unstoppable. Concurrent to an aggressive investment strategy in its domestic and Asian market, the e-commerce giant now looks to revamp business in other domains. Based on latest updates, Alibaba plans to expand its business network in Russia. Earlier today, head of Alibaba, Jack Ma pressed the significance of a deeper foray into Russia, as the market stands to be its fastest-growing overseas segment.
Mr. Ma explains: “Alibaba is ready to help Russian companies build a complete e-commerce system. There is great trade potential between China and Russia. This means we can do a lot of things together.” The respective statements were made during the second World Internet Conference in China. The interest in Russia refers to an earlier suggestion tapped by President Putin of Russia. The President had previously voiced interest to allow an international platform that would help in the promotion of Russian exports to international markets.
Alibaba’s chairman specified that the prospective platform would help small and medium sized enterprises in Russia to tap a bigger market. Concurrently, Alibaba’s interest stands in line to its stance of helping “small guys” build strategic ties with a bigger market.
Alibaba’s investment and acquisition strategy is no surprise to current and potential investors. In fact, the company’s ambitious plans to grow both inside and outside China have attracted a significant portion of investors who seek to gain from Alibaba’s fast-paced growth. On the contrary, a fraction of Alibaba stakeholders have voiced concerns about the expansion strategy which they consider to be “too” aggressive. A number of analysts have noted that a fast-paced expansion strategy could inflict pressure on the company’s margins and impact revenue generation.
Meanwhile, most of the analysts who cover Alibaba stock continue to depict positive notes on the company’s long-term potential and simultaneously its investment strategy. Out of a total of 49 analysts, 43 rate the stock a Buy, while six suggest a Hold. The 12-month consensus target for the stock is $95.85. This represents an upside potential of more than 16% over the last quoted price.
Of the recent sell-side updates on the stock, analyst Ma Yuan of BOCOM International Holdings rates the stock a Buy, with an estimated target price of $105. Similarly, analyst Robert Lin of Morgan Stanley recommends an Overweight/Attractive rating with an estimated target price of $101. Alibaba stock is up by more than 0.8% in pre-market trade today as of 08:40 AM EDT.
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