Alibaba’s Stock Is Cheap, but for Good Reason. Investors Should Be Wary.

Alibaba Group Holding looks tempting. Shares of the Chinese e-commerce elephantine are cheap—year to date, the U.S.-listed shares, astatine $118.66 connected Thursday, are disconnected 49% with a 15 multiple—after a twelvemonth of crackdowns and shake-ups. But investors should defy the impulse to pounce.

Some wealth managers person begun buying the shares. Of the analysts tracked by Bloomberg, 56 person Buy ratings, 5 person Hold ratings, and 1 a Sell; arsenic a group, they person an mean people terms of $202 for the shares.

And...