Cantor Fitzgerald Starts Alibaba (BABA) at Buy

Cantor Fitzgerald initiated coverage on Alibaba (: BABA) with a Buy rating and a price target of $90. Analyst Youssef Squali thinks Alibaba has the potential to dominate global online commerce.

"We believe that a differentiated pricing model, strong brand, and unmatched scale give Alibaba an unfair competitive advantage relative to peers both in and outside China. While the stock's not cheap, we believe the company's outsized growth and margin profiles, if sustained, should support higher valuation over time," said Squali.

"With $296B in GMV (TTM) on its China retail marketplaces alone, Alibaba is larger than Amazon and eBay combined. And with over 80% of total e-commerce volume in China, Alibaba offers investors one of the best opportunities to benefit from China’s e-commerce growth, in our view. Reflecting this trend is Alibaba’s revenue growth, which over the past five years increased to $8,463M in FY:14, a 68% CAGR. Similarly, profit margins saw meaningful expansion over this period as well, with EBITDA margin improving from ~21% in 2010 to ~59% in 2014, making it one of the most profitable business models in the industry today," he added.

For an analyst ratings summary and ratings history on Alibaba click here. For more ratings news on Alibaba click here.

Shares of Alibaba closed at $2.34 yesterday.

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