I Can’t Believe How Cheap These 3 Stocks Are Right Now!

Right now, there are three world-class businesses that the market is treating like they're in trouble. And that fear could be creating some of the best buying setups in the market today. One of them just jumped 14% in one single day. Another just bought back 16% of its entire company in the last 90 days. And the third one just launched an AI chip three times more powerful than its last one. Today, we're going to put these opportunities to the test. So the first stock is Alibaba. Think of Alibaba as the Amazon of China. They run massive online shopping platforms where hundreds of millions of people buy everything that you can possibly imagine. But just like Amazon, the part that gets a lot of people the most excited is not about the shopping. It's about the cloud business. Alibaba cloud rents out computing power to other companies and it's becoming a huge player in AI. Here is why this is interesting. Right now, Alibaba was trading below $70 a share not too long ago. In fact, it's low was about $58 per share. Now, if you've watched our channel for a while, you know that we've covered it quite frequently. Then, it went on a massive run all the way up to around $190. But right now, it has pulled back to about 125. So, you're looking at a business that's come way down from its recent high, but the underlying business appears to be getting stronger. Just recently, Alibaba announced a brand new AI chip that it says is three times more powerful than its previous one. So, why does that matter? Well, because building your own AI chip means you don't have to rely as much on the expensive chips from other companies. That can save enormous amounts of money over time and it could be sold externally down the road if they choose to do so. And listen to what the CEO said about their cloud business. Their annualized AI related product revenue has passed 5.5 billion dollars and is still growing at tripledigit rates, guys. Not double digits, not single digits, triple digits. AI now makes up 30% of their cloud revenue and they expect that to cross 50% within one year. So, let's run it through our everything Money process right now. All right, guys. So, Alibaba is now a $300 billion market cap business. And if you guys are part of this channel, you remember when it was a lot lower than that. You've got enterprise value of 366 versus a market cap of 302. The enterprise value is essentially if you wanted to buy the company and pay off all its debt. So this difference here is essentially their debt 50 $65 billion. Well, guess what? Last year's free cash flow was 11 billion. The 5-year average is 21 billion. So you see a big drop here probably because of capital expenditures. They're spending money on those data centers, all the things they need to do to keep up with the AI race, but as you can tell, they've got plenty of free cash flow to combat this debt here if they needed to. Now, it's selling for 26 times free cash flow, 19 times earnings. All right, not this is kind of pricey, but again, there's a story behind that. It's not just, oh, this is expensive or this is cheap. You have to understand why these numbers are existing right there. Now guys, I don't get why they do this, but they are paying a dividend. It eats up $4 billion of their cash flow. They can afford that. It's $1.6% dividend yield. Better than the market right now. But again, if they're a cheap company, keep buying back shares. Profit margin, 10-year profit margin of 14%, 5year of 9 and a half%, one year is 10 and a half. So hopefully that keeps getting back up to the levels they had before. Now guys, as you can see, their revenue growth has really slowed down. 26% a year for the last 10, 7.4 for the last five, 5.6 for the last 3 years. Now, guys, I've been talking about Alibaba for a long time. I've owned the shares. I lost them to covered calls around 135 or 140. It skyrocketed to 190 and I had I had PTSD from my days of Meta, but then it's fallen back. I sold some cash secured puts to get some more shares back. So, I'm building that position up again. And my thesis on Alibaba is long-term China play. Do I think China will be a much bigger economy 10, 20, 30 years from now? And if they are, will Alibaba be a big benefactor of that? I do think so. Now, let's go to our eight pillars here. It's a little ugly. We have four checks and four X's, but remember, it's not just about the check, the number of checks and X's, about the story being told. Cash flow doesn't bother me. That's a negative cash flow, but remember, their capital expenditures are a lot higher. Let's actually go look at that real quick. We're going to go to our cash flow statement right here. Capital expenditures. We're looking at years ago being 4 billion, 1.6 billion 10 years ago. Now 13 billion. So it's a big increase, guys. They're spending a lot of money like everybody else is. The question is, will it pay off? Now they're buying back shares like crazy. They've acknowledged our company's cheap. So when a company buys back its shares, it's by basically sitting there saying, "Hey shareholders, we're so cheap. We're going to decrease the number of shares outstanding and really increase that shareholder value." And that's what I love because as the stock fell to 70 $58 a share, a lot of companies would stop their buybacks. Alibaba said, "We're starting these things up and we're we're going to we're going to jump it off here real quick." Which I love. low debt, a lot of revenue growth, net income, and cash flow has not quite caught up yet, but hopefully that is a payoff in the future. Now guys, I've gone through a lot of metrics. I've gone through these eight pillars. It can feel overwhelming, especially if you're a brand new viewer. Don't worry, you're not alone. It's overwhelming for everybody at some point. Warren Buffett, every single great investor has been overwhelmed. The question I ask you is, do you want to get better at this? Do you want to feel better when you hear about these numbers? Do you want to be able to understand the things that you need to understand to make better decisions? That's all we're trying to do here. So, I've made it very easy for you. I created an absolutely free key metric PDF. It'll explain all those key metrics to you. Email it right to you. You'll have access to it. That way, you and I can speak the right the same language and you can understand everything we're talking about. And the other thing is you're going to appear a lot smarter to people around you as you're talking about the metrics that really do matter. So, click the link below or in our first pin comment and the PDF will be sent to you absolutely free in a matter of minutes. And guys, in a few more minutes, I'm going to go over what I believe the right price for me on Alibaba is. Let's go check out analyst estimates right now, guys. Analyst estimates, EPS growing from $5 a share to almost $12 per share. The question, are they right? We don't know. But look at it this way. If you think $12 a share is right, is it going to happen? and you assign a PE of 20, you're looking at a company with a $240 value 3 years from now. It's currently at 125. So, it's almost doubling if you believe this. And it actually PE of 20 applies to the company. And now, let's look at revenue, guys. Look at this. 155 over double to 313. Not huge growth, but nice and steady growth. Now, I'm not gonna lie to you. I wonder why Alibaba wouldn't grow faster. But maybe everybody's so negative on Alibaba now that it's really affected analysts because remember analysts are humans. They're just like you and I and they get affected by these things. But the bottom line is I think there's still a lot of good potential for Alibaba as China gets better. So guys, we have a story. We have some numbers. We put them together in the stock analyzer tool. What this allows us to do is it allows us to sit there and make assumptions about the future and then tell us based on those assumptions what the right price to pay for the company today is. Now, you got to remember this is our most popular feature on our website. But if you're not using it the right way, if you're not putting in reasonable assumptions, you're just going to get unreasonable um results at the end. So, it's really important to watch our videos and understand what we're doing here. So guys, I did a 10-year analysis and I thought analysts were being um conservative. Look what I did. Three, five, and 7% revenue growth. Profit margin 12, 15, and 18 and free cash flow of 15, 18, and 21. And the reason I did that is if you look at the last five and 10 years, free cash flow was better than their profit. It's just in the last year, free cash flow is lower because of those higher capital expenditures. Now, what PE would I apply to Alibaba 10 years from now? Not the PE today, nothing like that. What would I apply 10 years from now? I put 14, 18, and 22. And finally, 9% desired return. Now, guys, this is not the return I want. I don't recommend this to be the return you should get. This is the market 9 or 10%. But at the end of the day, guys, you got to remember that if you're going to buy an individual stock, give yourself that margin of safety. Give yourself a reason to buy it above the market. 9% just to sit there and say, "What do I think the company is worth?" So, I hit the analyze button. The stock's currently at 125. This is why I'm interested. Low price of 110 to 140, high price of 300 to 350, middle price of 190 to 224. And guys, like I said, this was based on 5% revenue growth. I don't think I was being overly aggressive here. So that's why I'm optimistic because I'm looking at a potential return if my middle assumptions occur of about 17 and a half percent per year. Now guys, I want to remind everybody, do not take our titles literally. Our titles are used in the YouTube game to get your attention and then teach you a deeper, more important lesson in the videos. So let's go to stock number two and that is Service Now. In simple terms, Service Now makes the software that big companies use to keep everything running smoothly behind the scenes. When you submit an IT request at work, when a company tracks its internal tasks, when departments need to talk to each other through one system, that's often Service Now. It is the kind of software that once a company installs it becomes nearly impossible to rip out. It is woven into how the whole business operates. This stock just jumped 14% in a single day and 24% in a single week and some very notable investors are paying attention. President Trump took a position in it and I was at a christing this weekend. Everybody's talking about President Trump being an amazing stock picker which made me laugh. Chuck Akre, a legendary investor known for buying only the highest quality businesses at a discount, initiated a position. Acre's famous for what he calls his three-legged stool. He looks for businesses with high, durable returns on capital, honest, skilled leaders who think long-term, and the ability to reinvest profits back into the business. The fact that Service Now passed that test tells you a lot about the quality here. But here's my favorite part. There's been fear that AI could replace software like Service Now, that companies could just build their own with a language model. The CEO, Bill McDermott, addressed it recently and he directly said, "The market thinks that maybe I can do everything with a language model and build the software myself, but that's not going to happen. Why would companies rebuild software like Service Now and pay 10 times more to operate it?" And guys, he's biased. He's the CEO of Service Now, but I'm telling you, he's right. Like, I get it that these things can be done. And I do believe AI is changing our world, but I don't think it's replacing everything out there. If you have a system that you don't have to rely on the maintenance and all that stuff yourself and you have service now you can pay a few bucks to why not doesn't mean it's not going to change it forever but I look at it thinking to myself would I rather rely on myself or a multiundred billion dollar business to be able to sit there and say provide the service for me now building a simple app with AI is one thing but replacing the missionritical software that runs an entire corporation is a completely different story. McDermott was so confident that he actually bought $3 million worth of stock himself at a $105 price per share. He also tied his own pay to the stock price and said it's only a matter of math before Service Now becomes a trillion dollar company. Guys, I like it when a CEO puts his own money in like that. You don't just take his word for it, but you do pay attention. So, let's run the numbers. And guys, remember the reason I teach on YouTube is for the exact reason I was so sick of people attaching themselves to a story instead of understanding the story and the numbers together. The story is really, really important, but if you pay the wrong price for that story, you're going to do very poorly. The numbers will tell you the right price. It'll help guide you to the right price. So, $135 per share, guys. This is $138 billion market cap business with an enterprise value of only 145. That difference of the debt we talked about before is only $8 billion. And look what they did. 4.6 billion last year in free cash flow and 3.1 billion a year for the last five years. Now the stock is down from a high of 240 just a year and a half ago, but it's still selling for 30 times free cash flow. That's still high, but look at the difference between free cash flow and net income. Net income's a lot lower. This is rare and something we like to see. Adobe has it. CRM has it. A lot of companies like that have this and I think it's important to remember that most people focus on this and the PE. So I think they're going to miss out on the potential here because the free cash flow is really where the lifeblood of the business is. So I love that. Other things I love, look at their profit margin. 10 years is 10%, 5 years is 12%, 1 year is 12.6. seems to be getting better, which makes sense because their gross profit, which is the profit on every extra dollar they bring in, is 76%. That's very high. So, if their gross profits high, as they bring in more revenue, it's going to make their profit margin higher and higher and higher. We've seen this happen across the board, Microsoft, Google, Facebook, all these companies, Adobe, as their gross margin is so high, it really drives up their profit margin as time goes on. So that could be a big tailwind for Service Now. Another thing I like, not much in acquisitions, only $2.5 billion in the last 5 years when the company is generating 3.1 billion a year. So they've spent less than one year of free cash flow making acquisitions. So it seems like a lot of internal growth. And look at this, their revenue growth has been 20% plus over the last 10 years, over the last 5 years, over the last three years. So it's still a fast growing business. Now, let's check out the eight eight pillars. Another one with four checks and 4x's. All right, so shares outstanding are only up two and a half%. Not bad. It's a little bit of dilution, but not a ton. So, I'm okay with that one. It's still these five-year PE and 5year price of free cash flow. I'm not worried about this so much. It's more about the 5year price to free cash flow. It is still really high. Low returns on capital, but look at these debt levels. Super low revenue growth up there. Net income growth. Cash flow growth is three billion in the last five years against revenue of nine billion. Look at that. That's a huge difference. So let's take a look at analyst estimates now. 417 per share in profit growing to 927. That's o over double in the next 6 years. All right. About 12% growth a year revenue-wise. 16 billion to 44 billion also in the next actually seven years here. But this is what kind of this is more than double. That's pretty it's almost triple the revenue over the next seven years. That's a lot of growth, guys. Now again, seven years is a long time. We don't know what's going to happen in that time, but it's nice to see that there is that kind of optimism out there. So guys, we go to the stock analyzer tool. Guys, let me show you my assumptions. The last time I did this, I did 10-year analysis. I did 7, 11, and 15% revenue growth. I did profit margin of 30, 33, and 36. Same with free cash flow. remember why even though the profit's a lot lower, the free cash flow is what matters. So, I'm just going to match them up for the time being. Now, what PE would I put on this company 10 years from now? Well, one thing I want to mention, guys, is the returns on capital are getting better. They're still not great, but they're getting better. So, I put 16, 19, and 22 times earnings because remember the market average is 15 to 16. That includes junk companies. You got to pay a premium for good companies. I think Service Now is a good company. And finally, I'm going to put in my 9% desired return. I hit the analyze button. And guys, I have a low price of 87, high price of 240, middle price of 144. So guys, even though a lot of people like it, I'm not really excited about 10% return. I'm going to wait a little bit longer here to get the stock at a at a price that makes more sense to me. Now guys, third stock is Salesforce. It's up huge today, up 10% today. Salesforce makes software that helps company manage their customers. Helps companies manage their sales teams. Every time a business needs to track who its customers are, what they bought, and how to keep them happy, there's a very good chance they're using Salesforce. It is the leader in what's called customer relation management. That is CRM. Now, Salesforce just reported earnings and we covered it on our Everything Money Plus channel and two numbers jumped out at me. First, the business is performing well. Revenue came in at 11.13 billion, beating expectations. And earnings per share came in at 3.88 versus 312 that was expected. Guys, that's a huge beat. Now, they also guided for fullear revenue about 46 billion and even higher earnings. But here's a number that really got my attention. In 90 days, Salesforce bought back 27 billion of its own stock. That is 16% of the business. What does that mean? If a company has a 100 shares outstanding and you own one of them, you own 1% of the business, but they just bought back 16% of their shares. They went from 100 shares down to 84 shares. You still own one share, but now you own one share out of 84. So, you own a little bit more than 1%. Now, you might be like, well, big deal. But guys, what if they kept doing that? What if they bought back half their shares and they went from 100 shares down to 50? You still own your one share and you doubled your percentage ownership in the company. You went from one out of 100 to one out of 50. That's from 1% to 2% of the business. That's how important buying back shares are if they're purchased at good prices. Buying back that much stock that fast tells you that management believes their own stock is cheap and may be rebounding soon. They're voting with billions of dollars. Now guys, here's why it makes sense. They're selling for 12 times free cash flow and their free cash flow is getting better. 14.8 8 billion last year versus 10.3 over the last 5 years and much higher than their net income. All right, guys. Other things, return on capital getting better. A lot of acquisitions in the last five years, $27 billion worth. They bought Slack. We all know Slack. Now, they do have more debt than I expected. $183 billion market cap versus 243 billion enterprise value. That's about $60 billion in debt. Now, with $14 billion last year, they can still afford that. But it is a big number. And I don't want to deny that. That's a lot of money, a lot of debt right there. Look at this, guys. Profit margin 11% a year for the last 10, 12% a year for the last five 18.73% last year. I mean, guys, it's still good stuff here. They do pay a dividend of 1.5 billion, which they can afford. Our our community has it as an average buy rating of 296 for its intrinsic value. Eight pillars. Okay. So, low return on capital, high PE. The rest are all check marks. Guys, look at this. Revenue growth's up 20 billion. Cash flow is up 9 billion. That's 45%. Marginal cash flow um margin on that company. That's insane. They can do that with a really high gross margin. Every extra dollar they add is showing to the bottom line on free cash flow tremendously. You've got to remember that. So analysts here have the company at 11.88 per share, growing to $24 a share in the next seven or eight years. So over double in the next seven or eight years. Revenue growth 41.9. So call it 42 billion growing to 89 billion. Again, 2x in that time frame. So let's go to our stock analyzer tool. We're going to put it all together right now. So guys, I did a 10-year analysis. I did five, seven and a half, and 10% revenue growth. I did profit margin of 12, 16, and 20 and free cash flow of 25,30, and 35. Now remember, I can either make these the same or just focus on free cash flow later on, which is what I'm going to do. PE 14, 18, and 22. Their ROIC is getting better, but I still don't like how low it is. And finally, my 9% desired return. Now, there is something that I have to let you know before we finish the stock analyzer. Most people don't fail at investing because they lack information. They fail because when the market feels unpredictable and every decision feels like it could be the wrong one, they freeze. And it's completely understandable. That anxiety is costing people far more than bad trades ever could. And misunderstanding is what creates fear. And fear creates costly mistakes. So, we're here to take away the misunderstanding to help you understand better. So imagine knowing the right price that you want to pay for a stock based on your own assumptions about the future, not someone else's guess. Imagine having eight clear pillars that tell you the story of a business and tells you what questions to ask next. And then imagine being able to use a screener that quietly watches the market for you so you can sit back and wait with confidence until the perfect price arrives. That is exactly what we've built at Everything Money. Just like I was demonstrating for you in this video, our community is a place where clarity replaces confusion, where your next step feels obvious instead of overwhelming, and where you're never making decisions in isolation. You're going to drastically decrease your second guessing. You're going to start trusting your instincts because they'll finally be backed by the right tools and the right people inside of our community. This isn't just about growing your money, guys. It's about becoming someone who's in control of their financial future, who can sleep well at night, knowing that they're making the right decisions for themselves. So, the question is, what's that worth to you? Now, here's what I want you to do. Is it worth a dollar per day? If so, start our 7-day trial. It's only seven bucks. Click the link in the description and get full access today. Run whatever stock you've been thinking about. See what the numbers actually tell you before you spend any money on the stock. And guys, there's a reason why over 70% of the people who sign up for our 7-day trial end up purchasing for the entire year. So, I hit the analyze button. I have a low price of 210, high price of 577, middle price of 353, 355. So, that gives me a return of 16.5% per year based on free cash flow and based on my middle assumptions. So, guys, if you found these three stocks exciting, you're going to want to see this next video. I picked seven stocks that I personally believe can beat the Magnificent Seven over the next decade. And the opportunity those names might be even bigger than what we just covered. So, click right here to watch. Thank you for your time.