How much $1,000 invested in Alibaba's mid-March low is worth if the stock hits Wall Street's price target

BABA shares of Alibaba Group Holding Limited, which peaked at $313.81 on October 19, 2020, have largely exceeded the level. After hitting a low of $73.28 on March 15, the stock has shown signs of reversal.

Regulators and economic weakness hurt Alibaba: Since Alibaba founder Jack Ma openly criticized the government and the system in late 2020, the company is under increasing regulatory scrutiny.

China's crackdown on its big and powerful tech companies began with Alibaba in late 2020. National securities regulator poured cold water on IPO plans of Alibaba's affiliate, Ant Financial. Later, regulators required Ant, a fintech company, to organize itself as a bank holding company, subjecting it to increasing scrutiny and also requiring higher standards for capital requirements.

In April 2021, Alibaba was fined a record $2.8 billion for abusing its dominant market position.

The regulatory crackdown then expanded to include other domestic tech companies in early 2021.

Adding fuel to the fire, China's economy has experienced a period of weakness over time, slowing consumer spending. For Alibaba, an e-commerce retailer, consumers are at the center of its scheme. The difficult situation began to be reflected in the fundamentals of the company.

Related link: Why JPMorgan is doubling down on Alibaba, JD and other Chinese tech stocks this year

Alibaba's stock shows resurgence from below: After consolidating around depressed levels until mid-May, the stock has started to recover. New fines imposed by regulators have triggered a further sell-off in the stock, although it still holds above the psychological level of $100.

Return on an investment at the mid-March low: A shrewd investor betting on a reversal after the mid-March low of $73.28 would be owning approximately 14 shares on a $1,000 investment value.

Wall Street analysts bullish on Alibaba. Of the 23 analysts rating Alibaba, 20 have buy ratings, while two remain on the sidelines, according to TipRanks. The analysts' average price target for the stock is $153.68.

The 14 shares would be valued at $2,151.52 if Alibaba hits the consensus price target. That would be a gain of 115%.

Alibaba closed Friday's session down 1.27% at $102.44, according to data from Benzinga Pro.

Photo: Courtesy of alibabagroup.com

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