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Alibaba (BABA) Announces Proposed Offering of Senior Notes (Revised)
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Alibaba Group Holding Limited (BABA - Free Report) recently announced that it intends to sell U.S. dollar-denominated senior unsecured notes in an underwritten registered public offering.
The interest rate, conversion rate and certain other terms of the notes are yet to be determined. The Chinese e-commerce goliath stated that the net proceeds would be used for general corporate purposes.
On a year-to-date basis, shares of Alibaba have steadily treaded higher. The stock has returned 117.7% compared with the industry’s gain of 65.6%.
Alibaba’s Cash Position
As of Sep 30, 2017, the company had cash equivalents and marketable securities balance of almost RMB159.9 (US$24.0 billion) compared with RMB148.2 (US$21.9 billion) in the prior quarter. Also, the company generated RMB30.5 billion (US$4.59 billion) of cash from operations and RMB22.5 billion (US$3.4 billion) of non-GAAP free cash flow.
We believe that the company has a strong balance sheet, which will help it in capitalizing on investment opportunities and pursuing strategic acquisitions, further improving its growth prospects. Moreover, the senior notes offering will bring down the company’s cost of capital, thus strengthening its balance sheet and supporting growth.
Bottom Line
Alibaba Group caters mainly to its native market. We remain positive about the company’s market position, expanding customer base androbust growth in core e-commerce business.
Also, its high revenues and strong metrics growth are big positives. We believe that the company is being driven by mobile and international expansion.
Image: Bigstock
Alibaba (BABA) Announces Proposed Offering of Senior Notes (Revised)
Alibaba Group Holding Limited (BABA - Free Report) recently announced that it intends to sell U.S. dollar-denominated senior unsecured notes in an underwritten registered public offering.
The interest rate, conversion rate and certain other terms of the notes are yet to be determined. The Chinese e-commerce goliath stated that the net proceeds would be used for general corporate purposes.
On a year-to-date basis, shares of Alibaba have steadily treaded higher. The stock has returned 117.7% compared with the industry’s gain of 65.6%.
Alibaba’s Cash Position
As of Sep 30, 2017, the company had cash equivalents and marketable securities balance of almost RMB159.9 (US$24.0 billion) compared with RMB148.2 (US$21.9 billion) in the prior quarter. Also, the company generated RMB30.5 billion (US$4.59 billion) of cash from operations and RMB22.5 billion (US$3.4 billion) of non-GAAP free cash flow.
We believe that the company has a strong balance sheet, which will help it in capitalizing on investment opportunities and pursuing strategic acquisitions, further improving its growth prospects. Moreover, the senior notes offering will bring down the company’s cost of capital, thus strengthening its balance sheet and supporting growth.
Bottom Line
Alibaba Group caters mainly to its native market. We remain positive about the company’s market position, expanding customer base androbust growth in core e-commerce business.
Also, its high revenues and strong metrics growth are big positives. We believe that the company is being driven by mobile and international expansion.
Alibaba Group Holding Limited Price and Consensus
Alibaba Group Holding Limited Price and Consensus | Alibaba Group Holding Limited Quote
Zacks Rank and Stocks to Consider
Alibaba currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader technology sector are Groupon Inc. (GRPN - Free Report) , PetMed Express, Inc. (PETS - Free Report) and SMART Global Holdings, Inc. (SGH - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings per share growth rate for Groupon, PetMed Express and SMART Global is projected to be 10%, 10% and 15%, respectively.
(We are reissuing this article to correct a mistake. The original article, issued, Nov 27, 2017, should no longer be relied upon.)