Alibaba (BABA) AI Stock Analysis

• Market Cap: $353.83B
• Dividend Yield: 1.33%
• Average Volume (3M): 12.24M
• Price to Earnings (P/E): 19.9
• Beta (1Y): 0.83
• Revenue Growth: 5.14%
• EPS Growth: 50.76%
• Country: US
• Employees: 124,320
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.62
• Shares Outstanding: 2,386,119,600
• 10 Day Avg. Volume: 8,471,936
• 30 Day Avg. Volume: 12,237,824
• PEG Ratio: 0.23
• Price to Book (P/B): 2.23
• Price to Sales (P/S): 2.26
• P/FCF Ratio: 29.07
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 0.42
• Enterprise Value/Gross Profit: 1.01
• Enterprise Value/Ebitda: 2.60
• 1Y Price Target: $201.33
• Price Target Upside: 34.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20
• EPS Forecast (FY): 6.29
• Revenue Forecast (FY): $147.54B

• Rating: 68 Neutral
• Price Target: $170.00 ▲(13.87% Upside)

Alibaba's overall stock score reflects strong revenue growth and profitability, but is tempered by cash flow challenges and mixed technical indicators. The strategic investments in AI and cloud are promising for long-term growth, but current financial pressures and valuation concerns weigh on the score.

Positive Factors

Revenue Growth

Strong revenue growth, particularly in e-commerce and cloud segments, indicates robust market demand and effective business strategies, supporting long-term expansion.

Cloud Segment Performance

The significant growth in cloud revenue underscores Alibaba's competitive edge in AI and cloud services, positioning it well for future technological advancements and market leadership.

AI and Product Innovation

Rapid adoption of the Qwen app highlights Alibaba's innovative capabilities in AI, enhancing its ecosystem and offering potential for new revenue streams.

Negative Factors

Decreased EBITA and Net Income

Significant declines in EBITA and net income due to strategic investments may strain financial resources, impacting profitability and investment capacity.

Operating Cash Flow Decline

A sharp decline in operating cash flow highlights potential liquidity challenges, which could limit Alibaba's ability to fund future growth initiatives or manage debt.

Free Cash Flow Outflow

Negative free cash flow indicates cash management issues, potentially affecting Alibaba's financial flexibility and ability to invest in strategic areas.

Alibaba Business Overview & Revenue Model

Company Description

Alibaba Group Holding Limited is a multinational conglomerate specializing in e-commerce, retail, internet, and technology. Founded in 1999 by Jack Ma and others, Alibaba operates various platforms, including Alibaba.com for global wholesale trade, Taobao for consumer-to-consumer sales, and Tmall for business-to-consumer transactions. The company also has interests in cloud computing, digital media, and entertainment, making it a key player in the digital economy, particularly in China and across Asia.

How the Company Makes Money

Alibaba generates revenue through multiple streams, primarily from e-commerce, which includes transaction fees and commissions from its platforms such as Taobao and Tmall. Advertising services also contribute significantly to its earnings, allowing sellers to promote their products on the platform. Additionally, Alibaba benefits from its cloud computing services, which provide infrastructure and data solutions to businesses, contributing a growing portion of its revenue. The company has established partnerships with various merchants and brands to enhance its ecosystem, further driving sales and service usage. Other revenue sources include logistics services and digital entertainment, allowing Alibaba to diversify its income and leverage its vast user base.

Alibaba Financial Statement Overview

Summary

Alibaba demonstrates strong revenue growth and profitability, supported by a solid balance sheet with low leverage. However, cash flow management presents challenges, particularly with negative free cash flow growth, which could impact future investments or debt repayments.

Income Statement

Alibaba's income statement shows strong profitability with a gross profit margin of 41.18% and a net profit margin of 14.63% for TTM. The company has demonstrated consistent revenue growth, with a notable TTM revenue growth rate of 12.8%. EBIT and EBITDA margins are healthy at 18.29% and 18.82%, respectively, indicating efficient operations. However, the slight decline in EBIT from the previous annual report suggests a need for monitoring operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.23, indicating prudent leverage management. The return on equity is robust at 14.72%, showcasing effective use of equity capital. The equity ratio stands at 54.8%, underscoring a strong equity base. Despite these strengths, the slight increase in debt levels over the past year warrants attention.

Cash Flow

Cash flow analysis reveals challenges, with a negative free cash flow growth rate of -204.04% TTM, highlighting potential cash management issues. The operating cash flow to net income ratio is 1.05, indicating adequate cash generation relative to net income. However, the free cash flow to net income ratio of 0.17 suggests limited free cash flow relative to profits, which could impact future investments or debt repayments.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.01T	996.35B	941.17B	868.69B	853.06B	717.29B
Gross Profit	416.69B	398.06B	354.85B	318.99B	313.61B	296.08B
EBITDA	161.59B	182.67B	164.01B	153.11B	128.23B	217.96B
Net Income	123.35B	130.11B	80.01B	72.78B	62.25B	150.58B
Balance Sheet
Total Assets	1.88T	1.81T	1.77T	1.75T	1.70T	1.69T
Cash, Cash Equivalents and Short-Term Investments	373.57B	464.77B	602.17B	557.62B	491.06B	517.56B
Total Debt	281.59B	248.49B	205.69B	195.63B	176.85B	181.68B
Total Liabilities	772.10B	715.21B	652.46B	630.33B	614.25B	607.40B
Stockholders Equity	1.03T	1.01T	986.89B	990.03B	949.90B	938.77B
Cash Flow
Free Cash Flow	-26.94B	77.54B	149.66B	165.40B	89.44B	188.60B
Operating Cash Flow	129.21B	163.51B	182.59B	199.75B	142.76B	231.79B
Investing Cash Flow	-201.87B	-185.41B	-21.82B	-135.51B	-198.59B	-244.19B
Financing Cash Flow	18.32B	-76.22B	-108.24B	-65.62B	-64.45B	30.08B

Alibaba Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 149.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BABA, the sentiment is Negative. The current price of 149.29 is below the 20-day moving average (MA) of 157.08, below the 50-day MA of 163.68, and above the 200-day MA of 136.30, indicating a neutral trend. The MACD of -2.72 indicates Positive momentum. The RSI at 36.86 is Neutral, neither overbought nor oversold. The STOCH value of 15.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BABA.

Alibaba Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MELI	77 Outperform	$98.03B	47.20	40.65%	―	38.01%	44.52%
AMZN	71 Outperform	$2.38T	31.44	24.33%	―	11.48%	50.70%
JD	70 Outperform	$41.39B	9.75	13.68%	3.40%	16.54%	-3.61%
PDD	70 Outperform	$151.77B	11.38	30.03%	―	11.25%	-7.28%
BABA	68 Neutral	$353.83B	19.91	12.39%	1.33%	5.14%	50.76%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CPNG	60 Neutral	$42.36B	109.75	8.73%	―	16.63%	-62.54%

Alibaba Corporate Events

Alibaba Reports November Share Movements to Hong Kong Exchange

On December 4, 2025, Alibaba Group Holding Limited submitted its Monthly Return for November 2025 to the Hong Kong Stock Exchange, as required by the Hong Kong Listing Rules. The report detailed movements in the company’s authorized share capital and issued shares, indicating a slight increase of 320,000 in issued shares. This submission is part of Alibaba’s compliance with regulatory requirements, reflecting its ongoing transparency and adherence to market rules, which could reassure stakeholders about the company’s operational integrity.

Alibaba Releases Interim Report for First Half of Fiscal Year 2026

On December 4, 2025, Alibaba Group Holding Limited released its interim report for the first six months of the fiscal year ending March 31, 2026. This report, required by the Hong Kong Stock Exchange, provides insights into the company’s financial performance and strategic initiatives, potentially impacting its market positioning and stakeholder interests.

Alibaba Reports October 2025 Share Movements to Hong Kong Exchange

On November 6, 2025, Alibaba Group Holding Limited submitted its monthly return for October 2025 to the Hong Kong Stock Exchange, detailing movements in its authorized share capital and issued shares. The report indicated a slight increase in issued shares, with 357,043 new shares issued, bringing the total to 19,088,637,327 shares. This submission is part of Alibaba’s compliance with the Hong Kong Listing Rules, ensuring transparency and regulatory adherence in its securities movements.

Alibaba Reports September 2025 Share Capital Movements

On October 9, 2025, Alibaba Group Holding Limited submitted its Monthly Return for September 2025 to the Hong Kong Stock Exchange, as required by the Hong Kong Listing Rules. The report detailed movements in its authorized share capital and issued shares, noting an increase of 15,648,800 in issued shares during the month. This submission underscores Alibaba’s compliance with regulatory requirements and reflects its ongoing activities in managing its share capital, which may impact its market positioning and shareholder interests.

Alibaba Completes Successful Exchange Offer for Senior Notes

On October 9, 2025, Alibaba Group announced the completion of its exchange offer for USD-denominated senior unsecured notes issued in November 2024. The exchange offer, which began on September 4, 2025, involved exchanging up to $2.65 billion in aggregate principal amount of its senior notes due in 2030, 2035, and 2054. The offer expired on October 2, 2025, with a high participation rate, as 99.6% of the 2030 and 2035 notes and 99.2% of the 2054 notes were tendered and subsequently canceled. This successful exchange offer is a strategic move for Alibaba, potentially improving its financial flexibility and strengthening its market position.

Alibaba Announces Share Repurchase Update for Q3 2025

On October 2, 2025, Alibaba announced a share repurchase update for the quarter ending September 30, 2025. The company repurchased 17 million ordinary shares, equivalent to approximately 2 million ADSs, totaling US$241 million in the U.S. market. This repurchase resulted in a net decrease of 3 million ordinary shares, or a 0.02% reduction in outstanding shares after accounting for shares issued under the ESOP. As of September 30, 2025, Alibaba had 18,552 million ordinary shares outstanding, with a remaining authorization of US$19.1 billion for its share repurchase program, effective through March 2027. This strategic move is part of Alibaba’s ongoing efforts to enhance shareholder value and optimize its capital structure.

Alibaba’s 2025 AGM Approves Key Resolutions

On September 25, 2025, Alibaba Group Holding Limited held its Annual General Meeting where shareholders approved several key resolutions. These included granting the Board a mandate to issue and repurchase up to 10% of the company’s Ordinary Shares, electing directors Eddie Yongming Wu, Jerry Yang, Wan Ling Martello, and Albert Kong Ping Ng, and appointing PricewaterhouseCoopers as the company’s independent auditors. The resolutions passed with significant majorities, reflecting strong shareholder support and potentially impacting Alibaba’s strategic flexibility and governance structure.