We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alibaba (BABA) Puts Stop on Weak-Performing Xiami Service
Read MoreHide Full Article
Alibaba (BABA - Free Report) takes back its share from the music streaming space by discontinuing its service, Xiami.
From Feb 5 onward, streaming, downloading and giving comments on albums or songs will stop on Xiami, which will be completely shut on Mar 5.
The company already put a stop on membership benefit payments and new digital album purchases. Users have started transferring their music playlists to other streaming services.
We note that the latest move will close Alibaba’s synergies from the promising music streaming market.
However, the move bodes well for the financial performance of the company as Xiami was delivering weak market performance for the past few years.
Journey With Xiami
Notably, Xiami, which was launched in 2008, was acquired by Alibaba in 2013.
The service’s social features, support for indie artists and smart discovery helped the company in gaining solid momentum among customers.
However, soon it started grappling with music rights issues and huge competitive pressure. Xiami’s slowdown began with online music patents, which caused obstacles in its operations.
Further, rising competition from Tencent’s(TCEHY - Free Report) QQ Music, KuGou Music and KuWo remained a major negative.
Tencent continued to witness a significant boost in its market share, while Alibaba’s Xiami faced a decline in the user base and lost large quantities of music rights.
Hence, we believe the latest move will free up Alibaba’s resources, which can then be utilized in business diversification to earn good returns in the days ahead.
This, in turn, will instill investor optimism in the stock in the near term.
The closure of Xiami comes on top of the company’s current issues, which majorly include theprobe announced by China’s State Administration for Market Regulation (“SAMR”) to look into its unhealthy business practices.
Nevertheless, the company’s strong fundamentals are expected to continue driving the momentum across its operating fields.
Alibaba’s e-commerce strength will remain one of its major driversin the near term as well as in the long run, owing to its strengthening IoT capabilities and aggressive international expansion strategies.
Moreover, its persistent efforts to add value to consumers and sellers through the consumer segment, product enrichment, and platform innovations remain major positives.
Further, the company’s robust cloud business, which emerged as a major contributor to top-line growth, remains noteworthy.
Zacks Rank & Stocks to Consider
Currently, Alibaba carries a Zacks Rank #3 (Hold).
Long-term earnings growth rates for Qurate Retail Group and The Childrens Place are currently pegged at 5.4% and 8%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
Alibaba (BABA) Puts Stop on Weak-Performing Xiami Service
Alibaba (BABA - Free Report) takes back its share from the music streaming space by discontinuing its service, Xiami.
From Feb 5 onward, streaming, downloading and giving comments on albums or songs will stop on Xiami, which will be completely shut on Mar 5.
The company already put a stop on membership benefit payments and new digital album purchases. Users have started transferring their music playlists to other streaming services.
We note that the latest move will close Alibaba’s synergies from the promising music streaming market.
However, the move bodes well for the financial performance of the company as Xiami was delivering weak market performance for the past few years.
Journey With Xiami
Notably, Xiami, which was launched in 2008, was acquired by Alibaba in 2013.
The service’s social features, support for indie artists and smart discovery helped the company in gaining solid momentum among customers.
However, soon it started grappling with music rights issues and huge competitive pressure. Xiami’s slowdown began with online music patents, which caused obstacles in its operations.
Further, rising competition from Tencent’s(TCEHY - Free Report) QQ Music, KuGou Music and KuWo remained a major negative.
Tencent continued to witness a significant boost in its market share, while Alibaba’s Xiami faced a decline in the user base and lost large quantities of music rights.
Hence, we believe the latest move will free up Alibaba’s resources, which can then be utilized in business diversification to earn good returns in the days ahead.
This, in turn, will instill investor optimism in the stock in the near term.
Alibaba Group Holding Limited Price and Consensus
Alibaba Group Holding Limited price-consensus-chart | Alibaba Group Holding Limited Quote
Wrapping Up
The closure of Xiami comes on top of the company’s current issues, which majorly include theprobe announced by China’s State Administration for Market Regulation (“SAMR”) to look into its unhealthy business practices.
Nevertheless, the company’s strong fundamentals are expected to continue driving the momentum across its operating fields.
Alibaba’s e-commerce strength will remain one of its major driversin the near term as well as in the long run, owing to its strengthening IoT capabilities and aggressive international expansion strategies.
Moreover, its persistent efforts to add value to consumers and sellers through the consumer segment, product enrichment, and platform innovations remain major positives.
Further, the company’s robust cloud business, which emerged as a major contributor to top-line growth, remains noteworthy.
Zacks Rank & Stocks to Consider
Currently, Alibaba carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the retail-wholesale sector are Qurate Retail Group, Inc. (QRTEA - Free Report) and The Childrens Place, Inc. (PLCE - Free Report) . Both the companies carry a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Long-term earnings growth rates for Qurate Retail Group and The Childrens Place are currently pegged at 5.4% and 8%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>