Alibaba Group Holding (ticker: BABA) went public on Friday at a price of $68 per share, which valued the company at $168 billion, making it one of the 40 largest companies in the world, according to S&P Capital IQ.

Once the stock started trading in the open market, however, investors bid the stock higher and it ended the day at almost $94 per share, valuing the company at $231.4 billion.

That’s an amazing public offering since the company was only founded 15 years ago and is now worth more than tech companies like eBay ($50.6 billion), Yahoo ($40.7 billion), Amazon ($153.1 billion) and Facebook ($202.6 billion).

I am frequently asked two questions about Alibaba. First, what is it?

Alibaba, through a variety of subsidiaries, is China’s largest ecommerce company, offering solutions to millions of businesses and hundreds of millions of consumers. Some analysts estimate that as much as 80 percent of China’s online shopping market is done at one of Alibaba’s sites.

The second question that I get is: are we going to buy some?

While we would never say never, the answer at this point is probably not. Actually, that usually leads to a third question: Why not? It’s a good, tough question and deserves an answer.

Let me start, though, with what we like about the company: it’s extremely profitable. The gross margin, the difference between revenue and the cost to produce the goods and services, is a staggering 73.5 percent. The net margin, the profit margin after all costs are considered, is 45.8 percent. Over the last five years, revenue growth has averaged 85 percent per year.

Consider Amazon, the largest ecommerce company in the US. Their revenue growth over the last five years is closer to 30 percent per year, their gross margins are 28.3 percent and their net margins are 0.80 percent.

In 2013, Amazon turned $81.6 billion in revenue into $181 million in profits. By contrast, Alibaba turned $52.5 billion in revenue into $35.6 billion in profits.

This kind of growth and profitability sure sounds good, doesn’t it? Why wouldn’t we buy this? The problem is that everyone knows about the growth and profitability and is willing to pay high prices for a piece of the company.

Right now, the price-to-earnings ratio (PE ratio) for Alibaba based on the expected earnings over the next year is 34.6. Amazon, to keep the same comparison going, has a forward PE ratio of 84.7. The forward PE ratio for the S&P 500 is 16.85, which we’ve written before, is on the expensive side. Alibaba, on this basis, is twice as expensive.

The question, as always, is whether the market is doing a good job putting a price on the stock. Does the current price reflect the present value of all of its future cash flows or is it overvaluing or undervaluing those future earnings?

I looked at two different discounted cash flow models created by people/organizations that I respect and one put the ‘intrinsic’ value of Alibaba at $65 per share, suggesting that the stock is highly overvalued, and the other at $90 per share, which is right about the current price.

The model that showed $90 per share had some pretty aggressive assumptions, like revenue would grow at 35 percent over the next five years and that profit margins would expand. That’s possible, but if Alibaba misses the mark for some reason, the intrinsic value estimate will be far too high.

In the end, the prospect of Alibaba stock doesn’t excite me. It strikes me as a classic ‘glamour’ stock that is overhyped and overvalued. Then again, I’ve missed out on some big upward stock movements like Google and Facebook because I couldn’t get comfortable with the valuation and the market proved me wrong.

It’s easy to look back and say that we should have bought Google or Facebook, although it’s even easier to forget the stocks that we also didn’t buy that failed miserably.

I take comfort knowing that some of this will show up in the funds when they have characteristics that we want like momentum if it goes well or value if it turns out poorly.

That might not be enough excitement for some people, but I’m reminded of a quote from the Nobel Prize winning economist, Paul Samuelson, who said, ‘Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.’