After announcing a buyback program of $6 billion worth of shares last week, Alibaba Group Holdings (NYSE:BABA) is now projected to continue rising until 2019 to which the time of the share repurchase plan has been set. This new program will replace the current stock buyback program.
The bullish forecast was also due to the massive growth it has shown in its most recent earnings report. This included a 60% revenue growth that beat most analysts forecasts. Revenue from their respective businesses such as their cloud computing and Alibaba’s Taobao platform has also risen by more than 50% compared to last year.
Alibaba shares, which have been surging in the past months by more than 37% year-to-date, has been forecasted by Wall Street analysts to rise and grow after as the company’s expansion and investments have been proven to be effective in the company’s efforts to expand beyond the e-commerce business.
Just by the first quarter of the year, Alibaba’s revenue has risen by 60% due to the increasingly fast rate of Alibaba users in China alone where the company was able to record more than 450 million shoppers on Alibaba’s main site and its sub-platforms.
Since the company’s IPO a couple of years ago, a strong fiscal growth has been seen as Alibaba’s annual non-GAAP free cash flow stood at US$10 billion according to Alibaba chief financial officer Maggie Wu.
MKM Partners analyst Rob Sanderson stated in a recent research report that the Chinese e-commerce giant has still a lot of room to grow due to the rising popularity of online shopping in China which is supported by high website traffic that lures in advertisers that also drive revenue for the company.
The stock also has been given a price target of $155, which is 24% higher than the current stock price. Estimates for the company’s revenue next year has also moved $730 million higher while year on year growth stays at 32%.
The company has been increasingly making more efforts in expanding all areas of its business including its financial, payments, and delivery department are being extended outside China in the past couple of months. These particular departments have also faced rising competition recently.
Just recently, Alipay has been launched in Hong Kong by Alibaba’s Ant Financial in an effort to directly compete with Tencent’s Weixin Pay. Alipay Hong Kong can now be used at more than 2,000 stores and restaurants starting Thursday. According to Ant Financial, rewards and loyalty programs is set to be added to the application to attract more users.
Alibaba also announced that it will invest around $7.3 billion in smart vehicles after top competitor JD.com revealed its plans of developing drones with the capability to deliver packages weighing at least one ton.