Alibaba and Deckers: Growth Stocks to Consider for Investors

Growth stocks can pave the way to a solid retirement. Alibaba and Deckers, despite recent struggles, have potential for long-term returns, making them worth a look for investors.

Date: 05-03-2025

AI Rating: 6

Alibaba Analysis

Alibaba's stock performance has been characterized by a year-to-date surge but is still down 58% from its previous highs. This situation arises from a slow economic recovery and increased competition in the Chinese e-commerce landscape. Nevertheless, the company’s valuation appears attractive at just 15 times this year’s expected earnings. Recent growth trends include a 5% year-over-year increase in transaction revenue and a substantial 32% growth in international commerce revenue.

**Alibaba's Cloud Computing Segment** saw revenue grow by 13% year-over-year in the last quarter. As AI-related demand surges, this segment could serve as a catalyst for future growth. The company boasts healthy cash flows, holding $51 billion in net cash, positioned to invest in opportunities, particularly in AI, which is crucial for sustaining its market dominance.

Deckers Outdoor Analysis

Deckers Outdoor has faced challenges, with shares down 38% from their highs after management's lower-than-expected earnings guidance. Despite this setback, the company has shown impressive growth, with total revenue doubling over the last five years and a striking 17% increase in revenue year-over-year for the most recent quarter. This growth is driven predominantly by strong sales from the Hoka brand, which has become a significant growth catalyst since its acquisition in 2012.

**Earnings Per Share (EPS)** are projected to grow at an annualized rate of 17% over the coming years, supported by expanding margins which improved to 60.3% in the last quarter. The stock is trading at 24 times forward earnings, a reasonable valuation given the growth expectations.

Stocks: BABA DECK NKE