Chinese e-commerce giant Alibaba (BABA) is trending lower in today’s pre-market trading. The stock is set to report its Q1 FY26 earnings next month. In a new report, Mizuho’s Top analyst, Jason Helfstein, lowered his price target on Alibaba stock from $160 to $149, pointing to growing concerns around profit margins. According to him, rising competition in China’s local commerce sector, especially in food delivery and instant retail, is beginning to hurt the company’s bottom line.
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Analyst’s Views on Alibaba Stock
Helfstein, a four-star analyst, said that this quarter marked the first clear sign of margin pressure for Alibaba, driven by its push to stay competitive in local commerce. Mizuho expects a sharp drop in margins in Q1 compared to the previous quarter.
Looking ahead, the analyst warned that this margin strain could continue through the rest of 2025 and into 2026 unless new rules are introduced to ease competitive pressure. In response, Mizuho slashed its June-quarter EBITDA forecast from 55 billion RMB to 45 billion RMB.
The firm also lowered its FY27 EBITDA estimate to RMB231 billion, reflecting Alibaba’s push to protect market share through heavy subsidies. Earlier this month, the company announced a 50 billion yuan ($7 billion) subsidy program via its Taobao unit. The initiative will support food delivery and online retail services as Alibaba tries to fend off growing competition from JD.com (JD), PDD Holdings (PDD), and Meituan.
Nevertheless, the analyst remains confident in Alibaba’s long-term outlook and maintained an Outperform rating on the stock. He noted that consumer demand stayed strong during the June quarter, helped by promotional events and smartphone trade-in offers.
Is Alibaba Stock a Good Buy Right Now?
Analysts remain highly bullish about Alibaba’s stock trajectory. With 14 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $151.81 implies about 25.31% upside potential from current levels.
