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Alibaba’s Stock Is Cheap, but for Good Reason. Investors Should Be Wary. Alibaba Group Holding looks tempting. Shares of the Chinese e-commerce giant are cheap—year to date, the U.S.-listed shares, at $118.66 on Thursday, are off 49% with a 15 multiple—after a year of crackdowns and shake-ups. But investors should resist the urge to pounce. Some money managers have begun buying the shares. Of the analysts tracked by Bloomberg, 56 have Buy ratings, five have Hold ratings, and one a Sell; as a group, they have an average target price of $202 for the shares. And Alibaba executives were upbeat at a recent investor day. They set a $100 billion gross merchandise value target for its Southeast Asia marketplace, Lazada, and outlined plans that align it more closely with Beijing’s priorities, such as catering to consumers in lower-tier cities and becoming carbon-neutral by 2030. They also discussed changes in the e-commerce channel as a response to new competition. Alibaba will undoubtedly remain a dominant force in China. But Alibaba’s investments, says Mizhou analyst James Lee, may take some time to pay back. A delay, coupled with a slowing economy and supply-chain woes, could hobble short-term growth. Meanwhile, U.S. and Chinese regulators are both trying to force some Chinese companies off U.S. exchanges. “[Alibaba] is a company more exposed to regulatory issues in all the areas where regulators have concerns,” says Phillip Wool, a managing director of Rayliant, who now favors onshore Chinese companies earlier in their growth trajectories. Even before the pandemic and crackdowns, China’s internet giants struggled to maintain rapid growth. Now, it’s a bigger problem.