UPDATE: CRT Capital Starts Alibaba (BABA) at Buy

CRT Capital initiated coverage on Alibaba (NYSE: BABA) with a Buy rating and a price target of $95.00. Analyst Neil Doshi thinks its current price range significantly undervalues the long-term growth potential.

"If AMZN, EBAY and GOOG were to have a baby, it would be Alibaba. Alibaba has the world’s largest GMV of any Internet retail service provider and 80%+ market share of China’s eCommerce market. Unlike other U.S. and Chinese Internet companies that have gone public recently, BABA has a proven track record of strong revenue growth (30%+) with high EBITDA margin (50%+). While shares of BABA have not started trading yet, we believe that the current pricing range of $66-$68 significantly undervalues the long-term growth potential of the Company. While the IPO midpoint price range was raised about 6% from $63 to $67, we believe that global investor demand for BABA will be very strong," said Doshi.

"Our $95 target price is based on EV/EBITDA and P/E valuation methodologies - we apply a 26x multiple to our C2016 EBITDA estimate of $8.2B and a 32x multiple to our C2016 EPS of $3.04. For context, BABA should generate 35%+ revenue CAGR from F2014-2017, and EBITDA should grow at 36% over the same period – solid growth vs. competitors like FB, EBAY, AMZN, and GOOG," he added.

For an analyst ratings summary and ratings history on Alibaba click here. For more ratings news on Alibaba click here.

Shares of Alibaba closed at $2.34 yesterday.

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