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Alibaba
(NYSE:BABA)
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Rating:54Neutral
Price Target:
$98.00
▼(-30.50% Downside)
Action:Reiterated
Date:05/24/26
The score is held back primarily by deteriorating recent financial performance (margin/ROE compression, unusual top-line volatility, and negative free cash flow). Technicals also lean bearish with the stock trading below longer-term moving averages. Offsetting factors include a solid balance sheet and an earnings-call outlook pointing to accelerating AI/cloud growth, but near-term margin and cash-flow pressure keeps the overall score in the mid-range.
Positive Factors
AI & Cloud Revenue Acceleration
Sustained high-growth in cloud and AI product revenue indicates Alibaba is capturing structural enterprise demand for AI services. A 40% cloud growth rate and rising AI mix support higher recurring, usage-based revenue and create pathway to improved unit economics as ARR and model services scale over multiple years.
Negative Factors
Sharp Profitability Compression
An 84% decline in adjusted EBITA reflects material near-term erosion of operating earnings. If investment payoffs lag or margins on new AI/cloud offerings take longer to scale, persistent operating profit weakness could reduce free cash flow and delay the timetable for returning to historical profitability levels.
Read all positive and negative factors
Positive Factors
Negative Factors
AI & Cloud Revenue Acceleration
Sustained high-growth in cloud and AI product revenue indicates Alibaba is capturing structural enterprise demand for AI services. A 40% cloud growth rate and rising AI mix support higher recurring, usage-based revenue and create pathway to improved unit economics as ARR and model services scale over multiple years.
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
$230.38B
Dividend Yield1.31%
Average Volume (3M)12.22M
Price to Earnings (P/E)14.4
Beta (1Y)0.92
Revenue Growth4.44%
EPS Growth-16.38%
CountryUS
Employees124,320
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)45.60
Shares Outstanding2,400,789,000
10 Day Avg. Volume12,168,314
30 Day Avg. Volume12,216,286
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 Cap8.05
Enterprise Value/Revenue1.81
Enterprise Value/Gross Profit4.55
Enterprise Value/Ebitda12.86
Forecast
1Y Price Target
$194.94Price Target Upside38.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)42.87
Revenue Forecast (FY)$1.13T
Alibaba Business Overview & Revenue Model
Company Description
Alibaba Group Holding Limited, through its various subsidiaries, furnishes crucial technological infrastructure and extensive marketing channels. This comprehensive support allows merchants, brands, retailers, and other businesses to effectively e...
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:May 13, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 28, 2026
Earnings Call Sentiment Neutral
The call presents a clear strategic story: strong top-line growth driven by accelerating AI + Cloud momentum (Cloud external revenue +40%, triple-digit AI growth, ARR targets) and improving unit economics in quick commerce, supported by a strong net cash position. However, near-term profitability and free cash flow are under material pressure (adjusted EBITA down 84%, FCF outflow RMB 17.3b) due to deliberate, large-scale investments and heightened capital intensity (compute demand ~10x vs 2022, server cost inflation >100%). Management frames these as intentional, long-term investments with clear monetization paths (MaaS, higher-margin AI services, T-Head chip upside), but the short-term trade-offs on margins and cash are significant. Overall, positives on growth and secular AI positioning are balanced by sizable short-term financial headwinds.Positive Updates
Group Revenue Growth
Total consolidated revenue of RMB 243.4 billion, with like-for-like group revenue growth of 11% year-over-year (excluding Sun Art and Intime).
Negative Updates
Large Decline in Adjusted EBITA
Total adjusted EBITA decreased 84% year-over-year, driven primarily by strategic investments in AI, quick commerce and user experience.
Read all updates
Q4-2026 Updates
Positive
Negative
Group Revenue Growth
Total consolidated revenue of RMB 243.4 billion, with like-for-like group revenue growth of 11% year-over-year (excluding Sun Art and Intime).
Read all positive updates
Company Guidance
Management guided that investments in AI + Cloud and consumption will continue to drive accelerating revenue and improving margins: group revenue grew 11% YoY to RMB 243.4 billion; Cloud Intelligence external revenue accelerated to 40% growth with AI‑related product revenue of RMB 9 billion this quarter and an annualized run‑rate of ~RMB 36 billion (USD 5.3 billion), accounting for 30% of cloud external revenue and posting triple‑digit growth for the 11th consecutive quarter — management expects AI products to exceed 50% of cloud revenue in about one year and model & application services ARR (platform ARR already >RMB 8 billion) to surpass RMB 10 billion in the June quarter and RMB 30 billion by year‑end; China e‑commerce revenue was RMB 122 billion (+6%) with CMR +1% (or +8% like‑for‑like), quick commerce revenue rose 57% to RMB 20 billion with UE targeted to turn positive by end of FY27; cloud adjusted EBITA margin was 9.1%, group adjusted EBITA fell 84% while GAAP net income rose 96% to RMB 23.5 billion, operating cash flow was RMB 9.4 billion (free cash flow outflow RMB 17.3 billion), net cash ~USD 38 billion (~USD 59 billion excluding long‑dated debt), a USD 1.05 per ADS annual dividend was approved, and management signaled continued heavy CapEx/OpEx to meet an anticipated ~10x 2022 compute demand (potentially exceeding the prior RMB 380 billion estimate) while ramping T‑Head chips (now serving >60% of deployed compute to external customers) to drive future margin expansion.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
Negative
141.01
Price Trends
122.08
Negative
129.17
Negative
145.84
Negative
Market Momentum
-8.04
Positive
24.05
Positive
29.67
Neutral
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 141.01 is above the 20-day moving average (MA) of 107.16, above the 50-day MA of 122.08, and below the 200-day MA of 145.84, indicating a bearish trend. The MACD of -8.04 indicates Positive momentum. The RSI at 24.05 is Positive, neither overbought nor oversold. The STOCH value of 29.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $117.27B | 8.05 | 24.04% | ― | 11.69% | -1.85% | |
70 Outperform | $2.61T | 28.58 | 23.34% | ― | 14.22% | 35.55% | |
70 Outperform | $89.40B | 46.55 | 29.58% | ― | 42.11% | -6.84% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $36.42B | 18.08 | 6.15% | 3.37% | 12.13% | -67.45% | |
54 Neutral | $230.38B | 14.40 | 10.00% | 1.31% | 4.44% | -16.38% | |
54 Neutral | $33.32B | -192.13 | -3.67% | ― | 13.10% | -163.64% |
* Consumer Cyclical Sector Average
BABA
Alibaba
96.14
-11.59
-10.76%
AMZN
Amazon
242.67
19.20
8.59%
MELI
Mercadolibre
1,763.36
-737.72
-29.50%
JD
JD
26.62
-4.37
-14.10%
PDD
PDD Holdings
82.39
-21.20
-20.47%
CPNG
Coupang
18.56
-11.44
-38.13%
Alibaba Corporate Events
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...
Alibaba Details April 2026 Share Capital Movements and Confirms Hong Kong Public Float Compliance
May 6, 2026
Alibaba Group Holding Limited reported routine changes in its share capital structure for April 2026 in a Form 6-K filed on May 6, 2026, in line with Hong Kong Stock Exchange disclosure rules. The company confirmed its authorised share capital rem...
Alibaba Issues New Shares Under Equity Incentive Plans in April 2026
Apr 24, 2026
Alibaba Group Holding Limited disclosed changes in its share capital pursuant to Hong Kong Stock Exchange requirements, reporting the issuance of new ordinary shares in April 2026 under its equity incentive plans. The disclosure, furnished to the ...
Alibaba Reports March 2026 Share Issuances and Confirms Hong Kong Public Float Compliance
Apr 8, 2026
Alibaba Group Holding Limited disclosed its Hong Kong Stock Exchange monthly return for the month ended 31 March 2026, filed to the U.S. Securities and Exchange Commission on 8 April 2026, showing no change in authorised share capital, which remai...
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.