The Chinese technology giant Alibaba (NYSE: BABA) has fallen from grace. 

As of this writing, the stock trades at around $94, just 38% above its IPO price in 2014. That's despite the fact the company has grown its annual revenues from $8 billion in fiscal 2014 to $126 billion in fiscal 2023 (which ended March 31). Consequently, the stock now trades at close to a historically low price-to-sales multiple of 2, much lower than its five-year average multiple of around 6.

That low valuation is sure to attract bargain hunters, but before you jump in, it's crucial to understand how the stock got to this point in the first place. Only then can you make an educated prediction of where it could go next.

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Source Fool.com