Alibaba (NYSE: BABA) stock price remains steady after posting record Singles’ Day sales of $38 billion. Despite record sales, the sales growth remains weakest since it started this event in 2009. The annual shopping festival sales growth stood around 26% this year.
The deceleration in sales growth is due to the slowing e-commerce industry in China. Last year, it had generated 27% sales growth on the Singles’ Day event. Alibaba stock price is currently trading around $186, down slightly from 52-weeks high of $195. Market analysts are expecting BABA shares to hit $200 mark in the coming days.
The Deceleration is Not Drastic
Fortunately, market analysts believe the decline is not drastic; the investors are currently focusing on the record number of $38 billion. This is the biggest one-day event in the world. The Black Friday clocked close to $25 billion in sales. Meanwhile, Cyber Monday reported almost $8 billion.
Almost 84 brands including Apple, Fast Retailing’s Uniqlo and L’Oreal have made more than 100 million yuan in sales in the first hour alone.
The majority of merchants used live streaming in its Tmall marketplace to sell products. “Nearly all our brands have opted for live streaming promotions sometime this year,” says Josh Gardner, who helps overseas companies sell products on Tmall.
Baird has set Baba stock price target at $200 despite concerns over slowing sales. Baird analyst Colin Sebastian said, “the magnitude of the slowdown appears less drastic than last year and that delivery levels had a healthy growth.”
Future Fundamentals are Strong for Alibaba Stock Price
Alibaba shares are likely to receive support from record Singles’ Day sales. This event sale of $38 billion is likely to help it in generating larger than expected growth in third-quarter revenue this year.
Baba has generated 40% year over year revenue growth in the latest quarter. The market analysts are also expecting its revenue growth to receive support from the acceleration in cloud revenue.