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Alibaba (BABA)
NYSE:BABA
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Alibaba
(NYSE:BABA)83Outperform
Positive Factors
AI and Cloud Growth
Alibaba stands out due to its competitive advantages in cloud infrastructure and versatile AI applications, making it a leading contender in the global open-source AI community.
Financial Valuation
The stock is trading at a reasonable valuation compared to global hyperscalers, indicating potential for growth.
Negative Factors
Economic and Competitive Risks
Concerns exist about macro uncertainty and the capability of defending their ecommerce market shares, along with margin uncertainty due to investment in core businesses and substantial capex acceleration.
Alibaba (BABA) vs. S&P 500 (SPY)
Market Cap
$312.51B
Dividend Yield0.75%
Average Volume (3M)38.25M
Price to Earnings (P/E)18.3
Beta (1Y)1.02
Revenue Growth4.28%
EPS Growth28.42%
CountryUS
Employees204,891
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)7.11
Shares Outstanding2,375,968,000
10 Day Avg. Volume47,789,339
30 Day Avg. Volume38,246,807
Financial Highlights & Ratios
PEG Ratio0.64
Price to Book (P/B)N/A
Price to Sales (P/S)2.42
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$165.31Price Target Upside27.31% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
Alibaba Business Overview & Revenue Model
Company DescriptionAlibaba Group Holding Limited, founded in 1999, is a leading multinational conglomerate specializing in e-commerce, retail, internet, and technology. Headquartered in Hangzhou, China, the company operates various businesses worldwide in sectors such as online and mobile commerce, cloud computing, digital media and entertainment, and innovation initiatives. Alibaba's core platforms include Taobao, Tmall, Alibaba.com, and AliExpress, which facilitate business-to-business, business-to-consumer, and consumer-to-consumer sales. Its ecosystem also extends to logistics, financial services, and marketing platforms, making it a significant player in global commerce.
How the Company Makes MoneyAlibaba generates revenue through multiple streams, primarily from its core commerce segment, which includes retail marketplaces like Taobao and Tmall, as well as international commerce platforms like AliExpress and Lazada. The company earns money through commission fees on transactions, advertising services, and membership fees for premium services. Additionally, Alibaba Cloud contributes to revenue through cloud computing services, offering infrastructure and data management solutions to businesses. Digital media and entertainment, including platforms like Youku and Alibaba Pictures, also contribute through subscription and advertising revenue. Furthermore, Alibaba benefits from strategic partnerships and investments, such as its stake in financial services company Ant Group, which provides additional financial and technological synergies.
Alibaba Financial Statement Overview
Summary
Alibaba shows strong financial performance with robust revenue growth, profitability, and operational efficiency. The balance sheet is stable with low leverage, and cash flow management is excellent, ensuring liquidity and investment capacity. While growth rates have moderated, Alibaba remains well-positioned in the industry.Income Statement
Alibaba shows strong revenue growth and profitability. The Gross Profit Margin is healthy at 37.8% in TTM, with a consistent increase in Total Revenue over the years. The Net Profit Margin has improved to 9.0% in TTM, indicating effective cost management. The EBIT and EBITDA margins are robust at 11.3% and 15.4% respectively, reflecting operational efficiency. However, the Revenue Growth Rate has slowed down recently, requiring attention for future growth strategies.82
Very Positive
Balance Sheet
Alibaba maintains a strong balance sheet with a high Equity Ratio of 54.1%, indicating financial stability and low leverage. The Debt-to-Equity Ratio is manageable at 0.21, showing conservative debt usage. Return on Equity is solid at 9.0%, but there is room for improvement. The company's ability to maintain substantial stockholders' equity and a healthy asset base is commendable, though increasing liabilities warrant cautious monitoring.78
Positive
Cash Flow
Alibaba demonstrates robust cash flow management with a strong Operating Cash Flow to Net Income Ratio of 1.75, indicating effective cash generation relative to earnings. The Free Cash Flow growth remains positive, albeit slower, showing sustained investment capabilities. The Free Cash Flow to Net Income Ratio of 1.38 underscores the company's ability to generate cash beyond its earnings, supporting future growth and debt servicing.85
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 852.88B | 941.17B | 868.69B | 853.06B | 717.29B | 509.71B | Gross Profit |
| 307.87B | 354.85B | 318.99B | 313.61B | 296.08B | 227.34B | EBIT |
| 112.32B | 113.35B | 100.35B | 105.30B | 170.05B | 172.40B | EBITDA |
| 107.26B | 164.01B | 153.95B | 144.56B | 157.50B | 185.79B | Net Income Common Stockholders |
| 32.58B | 80.01B | 72.78B | 62.25B | 150.58B | 149.43B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 571.03B | 571.03B | 524.47B | 455.08B | 483.44B | 363.21B | Total Assets |
| 1.76T | 1.76T | 1.75T | 1.70T | 1.69T | 1.31T | Total Debt |
| 205.61B | 205.61B | 161.35B | 141.34B | 149.15B | 125.43B | Net Debt |
| -42.51B | -42.51B | -31.73B | -48.55B | -172.11B | -205.07B | Total Liabilities |
| 652.23B | 652.23B | 630.12B | 613.36B | 606.58B | 433.33B | Stockholders Equity |
| 986.54B | 986.54B | 989.66B | 948.48B | 937.47B | 755.40B |
| Cash Flow | Free Cash Flow | ||||
| 89.72B | 149.66B | 165.40B | 89.44B | 188.60B | 135.22B | Operating Cash Flow |
| 143.03B | 182.59B | 199.75B | 142.76B | 231.79B | 180.61B | Investing Cash Flow |
| -178.42B | -21.82B | -135.51B | -198.59B | -244.19B | -108.07B | Financing Cash Flow |
| -74.00B | -108.24B | -65.62B | -64.45B | 30.08B | 70.85B |
Alibaba Technical Analysis
Positive
129.85
Price Trends
101.31
Positive
97.76
Positive
89.94
Positive
Market Momentum
9.94
Positive
61.24
Neutral
28.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BABA, the sentiment is Positive. The current price of 129.85 is above the 20-day moving average (MA) of 122.82, above the 50-day MA of 101.31, and above the 200-day MA of 89.94, indicating a bullish trend. The MACD of 9.94 indicates Positive momentum. The RSI at 61.24 is Neutral, neither overbought nor oversold. The STOCH value of 28.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BABA.
Alibaba Risk Analysis
Alibaba disclosed 70 risk factors in its most recent earnings report. Alibaba reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alibaba Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $312.51B | 18.26 | 12.08% | 0.75% | 4.28% | 28.42% | |
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
81 Outperform | $157.50B | 11.15 | 38.87% | ― | 84.13% | 122.96% | |
79 Outperform | $65.53B | 13.05 | 15.26% | 1.84% | 1.88% | 49.67% | |
76 Outperform | $104.43B | 54.65 | 43.92% | ― | 43.56% | 91.72% | |
71 Outperform | $30.58B | 9.32 | 9.01% | ― | -2.60% | 19.69% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
BABA
Alibaba
129.85
59.29
84.03%
AMZN
Amazon
203.80
29.68
17.05%
BIDU
Baidu
87.15
-11.10
-11.30%
MELI
Mercadolibre
2,059.87
532.58
34.87%
JD
JD
40.95
20.09
96.31%
PDD
PDD Holdings
113.41
-7.92
-6.53%
Alibaba Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 3.23% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong growth in Alibaba's core businesses, including a significant upswing in cloud and AI product revenue. Strategic divestments have streamlined operations and strengthened the financial position. However, challenges such as decreased free cash flow and losses in certain segments like Cainiao and AIDC remain. Overall, the highlights significantly outweigh the lowlights, indicating a positive outlook.Highlights
Strong Revenue and Growth Metrics
Overall revenue, excluding Alibaba consolidated subsidiaries, grew 11% year-over-year. AI-related product revenue maintained triple-digit year-over-year growth for the sixth consecutive quarter.
Cloud Business Growth
Cloud business revenue growth accelerated to 13%. AI momentum remains robust with AI-related product revenue sustaining triple-digit growth.
E-commerce Success
Taobao and Tmall businesses saw a significant upswing in CMR growth to 9% year-over-year. 88 VIP members maintained double-digit growth, reaching 49 million by the end of the quarter.
International E-commerce Business Growth
The international e-commerce business maintained strong growth, with AIDC expecting its first quarter of profitability in the next fiscal year.
Successful Asset Divestment
Agreements to dispose of interests in Senna for up to $1.6 billion and in-time for $1 billion were completed, reflecting strategic shifts.
Strong Financial Position
Operating cash flow increased 10% to RMB 70.9 billion. Alibaba maintains a strong net cash position of RMB 378.5 billion.
Lowlights
Decreased Free Cash Flow
Free cash flow decreased 31% to RMB 39 billion, mainly due to increased expenditure related to investments in cloud infrastructure.
Cainiao Revenue Decline
Revenue from Cainiao decreased by 1% and its adjusted EBITDA decreased by 76% due to ongoing restructuring.
AIDC Adjusted EBITDA Loss
AIDC's adjusted EBITDA was a loss of RMB 5 billion compared to a loss of RMB 3.1 billion in the same quarter of last year.
Company Guidance
During Alibaba Group's December Quarter 2024 earnings call, the company provided detailed guidance on its strategic focus and anticipated financial growth. Alibaba emphasized its commitment to its AI-driven strategy, noting a 13% revenue growth in its Cloud Intelligence Group, with AI-related product revenue maintaining triple-digit year-over-year growth for the sixth consecutive quarter. The company highlighted the launch of Qwen 2.5 Max, a flagship AI foundation model, which has seen widespread adoption with over 90,000 Qwen-based derivative models developed globally. Additionally, Alibaba's e-commerce platforms, Taobao and Tmall, experienced a 9% year-over-year growth in customer management revenue (CMR), supported by a growing base of 49 million 88 VIP members. The company also announced plans to substantially increase its investment in AI and cloud infrastructure over the next three years, surpassing the cumulative investment made over the past decade. Financially, Alibaba reported a consolidated revenue of RMB 280.2 billion, an 8% increase, and a 4% rise in consolidated adjusted EBITDA to RMB 54.9 billion, despite a 31% decrease in free cash flow due to increased cloud infrastructure investment. Looking ahead, Alibaba expressed confidence in its focused strategy on e-commerce and AI plus cloud, aiming for sustained growth and increased shareholder returns through strategic initiatives and asset divestments.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.