On Wednesday morning trade, Alibaba Group Holding Ltd (NYSE:BABA) shares gained 0.9%, after analysts at Susquehanna initiated coverage of the stock with a positive rating and has given a $220 price target on the BABA Stock.
Analysts at Susquehanna led by Shyam Patil see room for Alibaba to grow its Taobao and Tmall advertising business. According to their estimates that just 15 percent of merchants on Taobao and Tmall platforms actively use marketing features, “pointing to the potential for material upside.”
There are also chances that Alibaba Group Holding Ltd (NYSE:BABA) can grow outside of China as Susquehanna is also upbeat on the company’s efforts in this regard, to grow its e-commerce operations, and expand its cloud business.
An analyst Patil wrote, Alicloud is hitting an inflection point for profitability, and could reach margins similar to those of Amazon.com Inc.( AMZN)’s AWS cloud business in the next few years. In the space of e-commerce, Alibaba (BABA) has roughly 75 percent market share in China, whereas Amazon (AMZN) only has an estimated 35 percent of share of the US market, Patil added.
“We view Alibaba as the best way to play the secular growth of the internet in China,” he wrote. Patil became the 45th out of 48 Wall Street analysts tracked by FactSet to assign the company the equivalent of a buy rating.
In 2017, Alibaba shares have surged 94% so far.