Alibaba Group Holding Limited (89988) AI Stock Analysis

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Alibaba Group Holding Limited

(89988)

Rating:73Outperform

Price Target:―

Alibaba demonstrates strong financial performance with solid revenue growth and profitability. The earnings call highlighted positive strategic directions, especially in AI and cloud, despite some concerns over free cash flow. Technical analysis shows bearish momentum, while valuation metrics suggest fair pricing. Overall, the stock has a positive outlook with some risk factors to monitor.

Alibaba Group Holding Limited (89988) vs. iShares MSCI Hong Kong ETF (EWH)

Market Cap

$1.83T

Dividend Yield0.92%

Average Volume (3M)84.78K

Price to Earnings (P/E)14.8

Beta (1Y)1.39

Revenue Growth5.85%

EPS Growth30.65%

CountryHK

Employees124,320

SectorTechnology

Sector Strength89

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.67

Shares Outstanding19,090,063,000

10 Day Avg. Volume74,988

30 Day Avg. Volume84,779

Financial Highlights & Ratios

PEG Ratio1.16

Price to Book (P/B)1.74

Price to Sales (P/S)0.00

P/FCF Ratio10.41

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Alibaba Group Holding Limited Business Overview & Revenue Model

Company DescriptionAlibaba Group Holding Limited is a Chinese multinational conglomerate specializing in e-commerce, retail, internet, and technology. Founded in 1999 by Jack Ma in Hangzhou, the company operates various businesses worldwide and is best known for its e-commerce platforms such as Taobao, Tmall, and Alibaba.com. Alibaba also offers cloud computing services, digital media and entertainment, and innovation initiatives, reflecting its diverse portfolio that caters to both consumers and businesses.

How the Company Makes MoneyAlibaba makes money primarily through its core commerce segment, which includes retail marketplaces like Taobao and Tmall, where it earns revenue from advertising services and transaction fees. The company also generates significant income from its international commerce operations, including platforms like AliExpress. Additionally, Alibaba's cloud computing division, Alibaba Cloud, contributes to its revenue by providing a range of services such as data storage, networking, and analytics to businesses globally. The digital media and entertainment segment, which includes platforms like Youku and Alibaba Pictures, adds to the revenue through subscription fees and advertising. Strategic partnerships, investments in technology, and a focus on the digital economy further underpin Alibaba's diverse revenue streams and growth.

Alibaba Group Holding Limited Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q4-2025)

% Change Since: -13.53%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call for Alibaba presented a predominantly positive outlook, with robust growth in revenue and user engagement, particularly in cloud and e-commerce segments. However, challenges remain in achieving profitability in some areas and managing increased investments. The sentiment leans towards a positive outlook with some caution regarding future investments.

Q4-2025 Updates

Positive Updates

Strong Revenue Growth

Alibaba delivered strong performance this quarter with total revenue growing 10% year-over-year, and adjusted EBITDA increasing 36% year-over-year.

Cloud Revenue Acceleration

Alibaba Cloud's revenue growth accelerated to 18% this quarter, with AI-related products maintaining triple-digit year-over-year growth for the seventh consecutive quarter.

E-commerce User Growth

Taobao and Tmall Group saw stronger momentum in user growth, with 88VIP members surpassing 50 million. Customer management revenue rose 12% year-over-year.

International Commerce Growth

AIDC achieved year-over-year revenue growth of 22% this quarter, driven by strong performance in cross-border businesses.

Profitability in Digital Media

The Digital Media and Entertainment Group achieved profitability on an adjusted EBITDA basis this quarter.

Cash Return to Shareholders

Alibaba announced an annual dividend increase of 5% and a special dividend, returning a total of $16.5 billion to shareholders for this fiscal year.

Negative Updates

Reduced Free Cash Flow

Free cash flow decreased 76% to RMB3.7 billion, mainly attributed to increased cloud infrastructure expenditure.

Challenges in Achieving Profitability

AIDC's adjusted EBITDA was still a loss of RMB3.6 billion, though improved from the same quarter last year, indicating ongoing challenges in achieving profitability.

Impact of Increased Investments

Increased investments in technology and product development, particularly in AI and cloud, may pressure margins and EBITDA in upcoming quarters.

Company Guidance

During the Alibaba Group's fiscal year 2025 Q4 earnings call, several key metrics highlighted the company's robust performance. Total revenue, excluding Sun Art and Intime, grew by 10% year-over-year, while adjusted EBITDA increased by 36%. Alibaba Cloud's revenue saw an 18% growth, with AI-related product revenue maintaining triple-digit growth for the seventh consecutive quarter. Taobao and Tmall Group's customer management revenue rose by 12%, supported by a 0.6% software service fee and the increased penetration of Quanzhantui, while adjusted EBITDA improved by 8%. The company also announced a total cash dividend of $2 per ADS, totaling $4.6 billion, and returned $16.5 billion to shareholders through dividends and share repurchases. Overall, Alibaba reported consolidated revenue of RMB236.5 billion, a 7% year-over-year increase, with a consolidated adjusted EBITDA of RMB32.6 billion, up 36%.

Alibaba Group Holding Limited Financial Statement Overview

Summary

Alibaba Group holds a strong financial position with consistent revenue growth, robust profitability margins, and efficient equity utilization. The balance sheet is healthy with manageable debt levels, but cash flow growth has slowed, posing a potential risk. Overall, the company is financially sound but should monitor its cash flow trajectory.

Income Statement

Very Positive

Alibaba shows strong revenue growth with a 13% increase from the previous year and solid profitability with a TTM gross profit margin of 38.6% and a net profit margin of 12.3%. EBIT and EBITDA margins are also healthy at 13.0% and 17.1% respectively. However, net income growth has been moderate compared to past years.

Balance Sheet

Positive

The company maintains a stable financial position with a low debt-to-equity ratio of 0.26 and a strong equity ratio of 54.0%. Return on equity is robust at 12.1% for the TTM period, indicating efficient use of equity capital. The balance sheet reflects a healthy leverage and liquidity position, though slightly declining cash reserves could be a concern.

Cash Flow

Positive

Operating cash flow demonstrates strength with a high operating cash flow to net income ratio of 1.31. Free cash flow is substantial, but its growth has slowed recently, with a decrease of 36% compared to the previous year. The free cash flow to net income ratio remains strong at 0.80, suggesting good cash conversion.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	981.77B	941.17B	868.69B	853.06B	717.29B	509.71B
Gross Profit	378.93B	354.85B	306.62B	302.71B	285.35B	217.48B
EBITDA	168.30B	154.48B	133.26B	110.19B	217.12B	137.76B
Net Income	120.70B	80.01B	72.51B	61.96B	150.31B	149.26B
Balance Sheet
Total Assets	1.85T	1.76T	1.75T	1.70T	1.69T	1.31T
Cash, Cash Equivalents and Short-Term Investments	453.28B	571.03B	557.43B	490.35B	516.87B	375.41B
Total Debt	264.30B	205.61B	195.57B	176.60B	181.44B	147.29B
Total Liabilities	760.17B	652.23B	630.12B	613.36B	606.58B	433.33B
Stockholders Equity	1.00T	986.54B	989.71B	948.52B	937.52B	755.45B
Cash Flow
Free Cash Flow	96.17B	150.51B	165.40B	89.44B	188.60B	135.22B
Operating Cash Flow	157.53B	182.59B	199.75B	142.76B	231.79B	180.61B
Investing Cash Flow	-129.30B	-26.07B	-137.10B	-193.76B	-244.39B	-112.42B
Financing Cash Flow	-121.39B	-108.24B	-64.03B	-69.28B	30.28B	75.21B

Alibaba Group Holding Limited Technical Analysis

Technical Analysis Sentiment

Negative

Last Price102.30

Price Trends

50DMA

106.76

Negative

100DMA

110.58

Negative

200DMA

96.06

Positive

Market Momentum

MACD

-1.18

Negative

RSI

44.98

Neutral

STOCH

43.08

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:89988, the sentiment is Negative. The current price of 102.3 is below the 20-day moving average (MA) of 103.55, below the 50-day MA of 106.76, and above the 200-day MA of 96.06, indicating a neutral trend. The MACD of -1.18 indicates Negative momentum. The RSI at 44.98 is Neutral, neither overbought nor oversold. The STOCH value of 43.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:89988.

Alibaba Group Holding Limited Risk Analysis

Alibaba Group Holding Limited disclosed 70 risk factors in its most recent earnings report. Alibaba Group Holding Limited 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 Group Holding Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9618	82 Outperform	HK$401.67B	8.00	19.79%	23.88%	7.67%	90.63%
9988	79 Outperform	HK$2.04T	14.38	13.02%	1.83%	4.74%	73.72%
1810	78 Outperform	$1.52T	43.71	14.98%	―	38.46%	72.44%
0700	74 Outperform	HK$4.58T	21.51	21.25%	0.89%	8.88%	54.27%
89988	73 Outperform	$1.83T	14.85	12.97%	0.92%	5.85%	30.65%
3690	65 Neutral	$746.63B	16.57	23.82%	―	19.20%	156.71%
Sector *	63 Neutral	$33.87B	5.80	-11.87%	1.82%	5.31%	-18.50%

* Technology Sector Average

Performance Comparison

HK:89988

Alibaba Group Holding Limited

102.30

32.97

47.56%

HK:9988

Alibaba Group Holding Ltd.

103.20

29.00

39.08%

HK:9618

JD.com, Inc. Class A

125.30

21.20

20.37%

HK:3690

Meituan

119.20

3.10

2.67%

HK:1810

Xiaomi

57.40

40.72

244.12%

HK:0700

Tencent Holdings

496.60

115.13

30.18%

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.Date of analysis: Apr 20, 2025