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Cramer: Sky's the limit for baba
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Cramer: Sky's the limit for baba# Stock
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Cramer: Alibaba hasn't even scratched the surface
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$ 105.12 (19:59:58 PM)
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Cramer said he believes the estimates for Alibaba are too low and the
company will likely beat the current estimates and raise estimates for the "
out years" of 2015 and beyond.
How high could Alibaba's shares go? With the company likely to earn $2.78 a
share in 2015 and $3.60 in 2016, Cramer said fund managers could pay up to
twice the growth rate, or $222 a share, double its current level.
Using more conservative estimates, Cramer said investors might be willing to
value Alibaba alongside Facebook, which would give shares a price tag of $
160 using 2016 estimates.
Given that Alibaba is the dominant player in the rapidly growing Chinese
market, Cramer thinks investors will give the stock the highest multiple
they can, which explains why shares are heading up even before we know what
the company will have to say tomorrow.
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