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Alibaba
(NYSE:BABA)
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Rating:63Neutral
Price Target:
$139.00
▲(23.95% Upside)
Action:Reiterated
Date:08/21/26
BABA scores 63 primarily due to weakened recent financial performance (margin compression, sharp ROE decline, and negative free cash flow with unusual revenue volatility) despite a sturdy balance sheet. Technicals are supportive with improving momentum and the stock trading above key short-term averages, while valuation is reasonable but not compelling given current cash/earnings pressure. The latest earnings call adds a moderate positive tilt from strong AI + Cloud growth and improving cloud margins, tempered by heavy CapEx and near-term profit/FCF drag.
Positive Factors
AI and Cloud Growth
Rapid cloud growth and sustained AI adoption create a scalable enterprise revenue stream beyond commerce. Rising AI monetization, usage-based demand and improving cloud margins could strengthen Alibaba’s long-term growth mix.
Negative Factors
Profitability Compression
The sharp decline in operating and net margins indicates materially weaker earnings conversion than in prior years. Persistent investment, competitive spending and lower returns on capital could constrain profitability even if revenue growth improves.
Read all positive and negative factors
Positive Factors
Negative Factors
AI and Cloud Growth
Rapid cloud growth and sustained AI adoption create a scalable enterprise revenue stream beyond commerce. Rising AI monetization, usage-based demand and improving cloud margins could strengthen Alibaba’s long-term growth mix.
Read all positive factors
Alibaba Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales across Alibaba’s various business areas, revealing which segments are contributing most to growth and where there might be potential risks or opportunities.
Breaks down sales across Alibaba’s various business areas, revealing which segments are contributing most to growth and where there might be potential risks or opportunities.
Data provided by:
The Fly
The FlyAlibaba (BABA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$308.61B
Dividend Yield0.88%
Average Volume (3M)12.96M
Price to Earnings (P/E)27.3
Beta (1Y)0.96
Revenue Growth7.76%
EPS Growth-49.08%
CountryUS
Employees131,462
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)45.60
Shares Outstanding2,396,873,500
10 Day Avg. Volume10,554,118
30 Day Avg. Volume12,958,591
Financial Highlights & Ratios
PEG Ratio-1.10
Price to Book (P/B)1.90
Price to Sales (P/S)1.96
P/FCF Ratio-39.60
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$185.67Price Target Upside65.57% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)43.15
Revenue Forecast (FY)$1.13T
Alibaba Business Overview & Revenue Model
Company Description
Alibaba Group Holding Limited (BABA) is a China-based technology company whose businesses span e-commerce marketplaces, cloud computing, digital media and entertainment, and logistics-related services. It operates major retail and wholesale commer...
How the Company Makes Money
Alibaba primarily makes money through a mix of commerce-related monetization, cloud services, logistics services, and other digital services. (1) China commerce and international commerce: Across its retail and wholesale platforms, Alibaba earns r...
Alibaba Earnings Call Summary
Earnings Call Date:Aug 20, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Dec 01, 2026
Earnings Call Sentiment Positive
The call highlights very strong operational momentum in AI and cloud: 45% cloud revenue growth, triple-digit AI product growth with a RMB 49.5 billion annualized run rate, MaaS ARR acceleration, broad adoption of proprietary chips and a thriving Qwen ecosystem. These growth drivers are contrasted with near-term profitability and cash flow headwinds — total adjusted EBITDA down 30%, GAAP net income down 75%, large negative free cash flow and heavy, lumpy CapEx to build AI infrastructure. Management presents a confident long-term narrative (full-stack AI, proprietary silicon, pricing power in a supply-constrained market) and clear paths to improving margins and ROIC, but investors must weigh near-term cash outflows and segment losses against durable secular upside in AI + Cloud.Positive Updates
Strong Group Revenue Growth
Total group revenue rose 9% year-over-year to RMB 269 billion in the quarter, driven by strength in cloud and quick commerce businesses.
Negative Updates
Decline in Consolidated Adjusted EBITDA
Total adjusted EBITDA decreased 30% YoY to RMB 27.3 billion, primarily due to increased investments in technology despite cloud improvements.
Read all updates
Q1-2027 Updates
Positive
Negative
Strong Group Revenue Growth
Total group revenue rose 9% year-over-year to RMB 269 billion in the quarter, driven by strength in cloud and quick commerce businesses.
Read all positive updates
Company Guidance
Management guided that AI + Cloud will remain the primary growth engine and that cloud revenue growth—already accelerating to 45% year‑over‑year this quarter—should continue to accelerate with cloud adjusted EBITDA margin expanding sequentially (reported ~11.6–12% this quarter); AI‑related product revenue was RMB 12.4 billion this quarter (annualized run‑rate ~RMB 49.5 billion / ~USD 7.3 billion) and now represents 35% of external cloud revenue, MaaS ARR has surpassed RMB 16 billion (management reiterated a year‑end target of ~RMB 30 billion), and management expects next‑quarter AI annualized revenue to approach USD 10 billion; they reiterated a long‑term cloud target of RMB 100 billion external revenue by 2030 with gross margin potential of ~20%, noted compute demand will outstrip supply for the foreseeable future, and signaled continued heavy CapEx (this quarter ~RMB 67–67.7 billion; 3‑year plan RMB 380 billion with ~RMB 190 billion spent to date) with servers expected to breakeven in ~3 years (potentially 2.5 years) and deliver positive FCF thereafter, while near‑term cash metrics reflect higher investment (operating cash flow up 11% to RMB 22.9 billion; free cash flow outflow RMB 44.7 billion) but a strong balance sheet (net cash ~USD 30.7 billion, alternative basis ~USD 46.5 billion) and ongoing share repurchases (USD 162 billion disclosed this quarter).Alibaba Financial Statement Overview
Summary
Income Statement
46
Neutral
Balance Sheet
78
Positive
Cash Flow
55
Neutral
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.02T | 996.35B | 941.17B | 868.69B | 853.06B |
| Gross Profit | 407.53B | 398.06B | 354.85B | 318.99B | 313.61B |
| EBITDA | 186.30B | 182.67B | 164.01B | 153.11B | 128.23B |
| Net Income | 103.59B | 130.11B | 80.01B | 72.78B | 62.25B |
Balance Sheet | |||||
| Total Assets | 1.90T | 1.81T | 1.77T | 1.75T | 1.70T |
| Cash, Cash Equivalents and Short-Term Investments | 357.59B | 464.77B | 602.17B | 557.62B | 491.06B |
| Total Debt | 259.02B | 248.49B | 205.69B | 195.63B | 176.85B |
| Total Liabilities | 780.37B | 715.21B | 652.46B | 630.33B | 614.25B |
| Stockholders Equity | 1.06T | 1.01T | 986.89B | 990.03B | 949.90B |
Cash Flow | |||||
| Free Cash Flow | -50.72B | 78.16B | 150.82B | 165.52B | 87.95B |
| Operating Cash Flow | 76.21B | 164.82B | 184.01B | 199.90B | 140.39B |
| Investing Cash Flow | -67.34B | -206.61B | -26.27B | -137.20B | -190.54B |
| Financing Cash Flow | -20.57B | -57.12B | -104.81B | -64.07B | -68.13B |
Alibaba Technical Analysis
Positive
112.14
Price Trends
114.25
Positive
122.01
Positive
137.03
Negative
Market Momentum
3.59
Negative
63.62
Neutral
69.63
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 112.14 is below the 20-day moving average (MA) of 123.98, below the 50-day MA of 114.25, and below the 200-day MA of 137.03, indicating a neutral trend. The MACD of 3.59 indicates Negative momentum. The RSI at 63.62 is Neutral, neither overbought nor oversold. The STOCH value of 69.63 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 1 New Risks
1.
Changes to our shareholder return initiatives may adversely affect the trading prices of our ADSs and Shares. Q1, 2024
Alibaba Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
88 Outperform | $2.81T | 20.53 | 30.50% | ― | 15.77% | 88.63% | |
77 Outperform | $97.44B | 52.32 | 26.54% | ― | 46.01% | -9.25% | |
77 Outperform | $127.42B | 8.56 | 24.04% | ― | 11.69% | -1.85% | |
66 Neutral | $39.80B | 18.33 | 6.15% | 3.31% | 7.23% | -57.76% | |
63 Neutral | $308.61B | 27.25 | 10.00% | 0.94% | 7.76% | -49.08% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $29.23B | -37.89 | -18.84% | ― | 9.92% | -309.73% |
* Consumer Cyclical Sector Average
BABA
Alibaba
119.34
-2.50
-2.05%
AMZN
Amazon
258.63
29.79
13.02%
MELI
Mercadolibre
1,922.73
-507.89
-20.90%
JD
JD
29.37
-1.43
-4.66%
PDD
PDD Holdings
88.38
-38.73
-30.47%
CPNG
Coupang
16.45
-12.30
-42.78%
Alibaba Corporate Events
Alibaba Adjusts Exchange Terms on Zero Coupon Bonds After Alibaba Health Dividend Approval
Aug 14, 2026
On August 14, 2026, Alibaba Group Holding Limited announced an adjustment to the exchange terms of its HK$12.023 billion zero coupon exchangeable bonds due 2032, which are referenced to ordinary shares of Alibaba Health Information Technology Limi...
Alibaba Details Late-June to Early-July 2026 Share Buybacks and Capital Movements
Jul 10, 2026
Alibaba Group Holding Limited disclosed a series of recent changes related to its issued share capital as part of regulatory filings in Hong Kong and the United States. On July 10, 2026, the company furnished multiple Next Day Disclosure Returns t...
Alibaba Details June 2026 Share Capital Movements in Hong Kong Monthly Return
Jul 7, 2026
On July 7, 2026, Alibaba filed a Form 6-K in the United States to furnish its mandatory Hong Kong monthly return for June 2026, detailing movements in authorised and issued share capital. The filing underscores Alibaba’s dual-compliance obli...
Alibaba Details Late-June Share Buybacks and Capital Movements in July 6 U.S. Filing
Jul 6, 2026
Alibaba Group Holding Limited, a major Chinese e-commerce and technology group with dual listings in Hong Kong and New York, reported recent movements in its share capital to U.S. regulators on July 6, 2026. The filing highlights its ordinary shar...
Alibaba Files June Share Issuance and Buyback Disclosures in Hong Kong and U.S.
Jun 26, 2026
Alibaba Group disclosed recent movements in its share capital through a series of Next Day Disclosure Returns filed with the Hong Kong Stock Exchange and furnished to the U.S. Securities and Exchange Commission on June 26, 2026. The filings cover ...
Alibaba adjusts conversion terms on 2031 convertible notes after 2026 dividend
Jun 18, 2026
Alibaba Group Holding Limited has adjusted the conversion terms on its convertible senior notes due 2031 following the declaration of its fiscal 2026 annual cash dividend, announced on May 13, 2026. With effect from June 11, 2026, the conversion r...
Alibaba Files Fiscal 2026 Hong Kong Annual and ESG Reports
Jun 18, 2026
Alibaba Group Holding Limited has released its Hong Kong annual report and a separate environmental, social and governance (ESG) report for the fiscal year ended March 31, 2026, as part of its regulatory obligations. Filed with the U.S. Securities...
Alibaba Reports Modest Share Increase and Confirms Public Float Compliance in May 2026
Jun 3, 2026
Alibaba Group Holding Limited reported routine changes to its share capital structure for May 2026 in a Form 6-K filed on June 3, 2026, alongside its required Hong Kong Stock Exchange monthly return. The company’s authorised share capital re...
Alibaba Issues New Shares for Director RSU Vesting, Slightly Expands Share Capital
May 22, 2026
On May 22, 2026, Alibaba filed a Form 6-K in the United States noting that, as a Hong Kong-listed issuer, it had submitted a Next Day Disclosure Return to the Hong Kong Stock Exchange dated May 19, 2026. The filing details a modest increase in Ali...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.