Chinese e-commerce giant Alibaba reports earnings before the bell Thursday, and Morningstar strategist R.J. Hottovy remains convinced that share prices look "fairly undervalued" after their recent decline.
Alibaba's stock has pulled back about 23 percent year to date, currently trading around $80. Morningstar has a $90 fair value price estimate on the stock.
"With shares trading at $80, I think it could be an attractive point," Hottovy told CNBC's "Tech Bet." "I think there's a lot of negativity built in to the stock right now, and so all it will take is a little bit of positive news to get this thing again. It might be worth a look at current levels."
Hottovy remains optimistic on growth despite Alibaba founder Jack Ma's recent decision to freeze hiring after he said the company grew too quickly, . Hottovy said Alibaba has an opportunity to move into smaller Chinese cities.
"I think there's a lot of demand for branded products in those regions and without the established retail framework that a lot of developed countries have, I think e-commerce will fill that void," Hottovy said.
Morningstar forecasts an average annual growth rate of around 30 percent over the next five years for Alibaba. Hottovy said there are tailwinds pushing the Chinese company toward continued success.
He pointed out that the Chinese consuming class is set to double in the next 10 years or so, largely due to state mandated wage growth. That will give consumers discretionary spending power.
Another driver is urbanization trends in China. As more and more consumers move to cities and take higher paying jobs, e-commerce will flourish, Hottovy said.
Disclosure: Hottovy does not own shares of Alibaba.