Alibaba (NYSE:BABA) stock has taken a hammering at the stock market as a result of Beijing’s crackdown on its top tech companies.

BABA stock has been down more than 30% in the past nine months. However, after recent investments in strengthening its businesses and reducing its risks, the company looks in great shape to mount a comeback.

Alibaba’s decline began late last year when the Chinese government launched an antitrust probe against its eCommerce segment. It was fined roughly $2.82 billion and was forced to withdraw from many of its exclusive deals with various merchants.

Additionally, Ant Group’s IPO was also suspended last year, which could’ve immensely benefited Alibaba. Alibaba owns one-third of Ant and uses its Alipay platform to facilitate online transactions.

Ramping Up Investments

Alibaba remains a fundamentally robust business as its core operating segments continue to grow at impressive rates. Despite its strong growth rates, BABA stock trades at under three times forward sales, making it an attractive long-term bet.

Investors are seriously concerned about Alibaba’s $15.5 billion contribution to China’s “common prosperity” initiatives. It raises about the company’s subservience to the Chinese government and the influence of the government. However, investors seem to be missing how the company is killing two birds with one stone here.

With its contribution, the hope is that it would probably come under less scrutiny of the government and get protected from Western competition.

The strategic deployment of the funds may also garner a lot of goodwill from the Chinese people. Perhaps more importantly, it is likely to increase its customer base, as the contribution focuses on the deployment of digital services in underdeveloped areas.

Furthermore, Alibaba has also been investing in its underlying businesses to improve sales from existing customers.  The goal is to create increase customer engagement, increase purchase frequency, and offer unique value propositions.

We already see the results of these investments as Taobao adds new users from underserved areas and boasts close to 100 million monthly active users.

Retail businesses such as Ele.me have witnessed a massive 50% order growth in the past year. Additionally, the company’s investments in AMap could make it more competitive with Baidu (NASDAQ:BIDU) Maps down the road.

Fundamentals Remain Strong

Alibaba suffered multiple setbacks in the past year, but its core businesses continue to deliver. In fiscal 2021, its revenues shot up 41% to $109.5 million, and its adjusted net income (excluding the antitrust fine) rose 30% to $26.3 billion.

Core commerce revenues also increased 42%, along with a 50% increase in cloud computing revenues.

Analysts are expecting revenue to rise 29% this year for Alibaba. On the flip side, the consensus is that adjusted EPS will take a substantial hit of 26% as the companies rely more on lower-margin retail businesses during the year and makes several new investments.

However, analysts expect revenues and adjusted EPS to rise 21% and 15% respectively next year. Based on these estimates, BABA stock still trades at below three times forward sales.

Alibaba’s domestic retail business still accounts for more than 65% of its total sales. However, its other businesses, including international retail, logistics, and cloud computing sales, are also expanding at an impressive pace. Hence, there is plenty of room for the company to grow even more thanks to its non-core businesses.

Bottom Line on BABA Stock

BABA stock has taken a considerable beating in the past year on the back of its regulatory challenges, but it’s a fundamentally solid business that continues to perform incredibly well across all its segments.

Additionally, its recent investments will reduce its regulatory risks and expand its total addressable market in the future. Therefore, BABA stock remains a top play in the eCommerce realm.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.