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Alibaba Group Holding Ltd (BABA) To Grow Its Earnings by 30% in Next 3 Years: Brian Nowak

Brian Nowak, a senior analyst at Susquehanna, is bullish on Alibaba Group Holding Ltd (NYSE:BABA). In a video segment on CNBC, he has said that the company may soon reach 110$ per share from its current trading price of $88.81. Alibaba trades now at twenty-eight times its earnings and, according to Nowak, this is a small price to pay for a company that is riding the huge Chinese online retail market. 1

“The company over the next three years is going to grow its top line almost 40% and its earnings 30% […],” says Nowak.

Alibaba Group Holding Ltd (NYSE:BABA) has recently announced a 15% stake in a Chinese online hotel information service provider, worth around a half a billion dollars. Nowak has commented on the news saying that Jack Ma, Chairman and chief visionary at Alibaba Group Holding Ltd (NYSE:BABA), wants the company to become a “global story” with exposure to many sectors in the online business.

“This is something that investors have to understand about Alibaba Group Holding Ltd (NYSE:BABA) that […] it is not just going to be an e-commerce company, it’s going to be a platform to enable all online transactions, including travel”

Surprisingly, Alibaba Group Holding Ltd (NYSE:BABA)’s stock has not being very volatile in the first week since its IPO, experiencing moves of no more than 3%. In this regard it is being treated by the market as a mature company. Brian Nowak has said that some of the credit may also go to the way the IPO has been handled by NYSE. Comparing it to the last big IPO, which was Facebook Inc (NASDAQ:FB), Alibaba Group Holding Ltd (NYSE:BABA) has not experienced big volatility precisely because the IPO price was set right and there were no big questions about the company’s profitability, as was the case with Facebook Inc (NASDAQ:FB), suggested Nowak.

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