上周，纽约大学（New York University）金融学教授、交易估值专家阿斯沃斯•达摩达兰针对阿里巴巴股票估值发表了一篇分析文章。达摩达兰通常认为，大部分火爆的华尔街IPO交易都估值过高。
Alibaba’s IPO might turn out to be the rare hot, hyped Wall Street deal that’s also a bargain.
Put another way: Alibaba might be the Amazon of China, but it won’t be the next Facebook of the IPO market. (Facebook’s IPO, for those who don’t remember. didn’t go so well.)
Last week, AswathDamodaran, a finance professor at New York University and recognized guru when it comes to valuing deals, published an analysis of what investors should pay for Alibaba’s shares. Damodaran typically thinks that most hot Wall Street IPOs are overpriced.
Ten years ago, for instance, Damodaran said investors shouldn’t pay more than $40 for shares of Google . The search giant IPOed for more than twice that, at $100. For Facebook , he said a fair price was $28. The social network’s IPO price was $38. (Although the stock quickly plummeted to nearly $18.) For Twitter , Damodaran’s price was $18. It IPOed at $26.
So what does Damodaran think Alibaba’s share should be worth? More than Wall Street thinks, for a switch. Damodaran’s price is $66, which is at the high end of the $60-to-$66 IPO range that Wall Street has set for Alibaba. So, at least according to Damodaran, the worst investors who get shares in the IPO will do is pay what the company is worth. They might even get a slight deal.
Not everyone agrees. Yahoo shareholders seem wary. My Fortune colleague Shawn Tully says investors should “stay away” from Alibaba’s IPO. At $66, the company’s shares would have a price-to-earnings ratio (based on its last fiscal year, which ended in March) of 41. That’s considerably higher than the average P/E of 19 of companies on the S&P 500. Seems expensive? Maybe not.
Price-to-earnings multiples and stock valuations in general have a lot to do with how fast a company is growing. The faster a company is growing, the higher the p/e it receives. Alibaba is growing fast. Its earnings in the three months ending in June jumped 200% from the same period a year ago. Factor those profits in, and Alibaba’s p/e drops to 29. That’s less than fellow Chinese Internet companyTencent, which focuses on online games and trades for 47 times trailing earnings.