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Alibaba Group Holding Limited (HK:89988)
:89988
Hong Kong Market

Alibaba Group Holding Limited (89988) AI Stock Analysis

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HK

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)

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
85
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
80
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
78
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.
BreakdownTTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income Statement
Total Revenue981.77B941.17B868.69B853.06B717.29B509.71B
Gross Profit378.93B354.85B306.62B302.71B285.35B217.48B
EBITDA168.30B154.48B133.26B110.19B217.12B137.76B
Net Income120.70B80.01B72.51B61.96B150.31B149.26B
Balance Sheet
Total Assets1.85T1.76T1.75T1.70T1.69T1.31T
Cash, Cash Equivalents and Short-Term Investments453.28B571.03B557.43B490.35B516.87B375.41B
Total Debt264.30B205.61B195.57B176.60B181.44B147.29B
Total Liabilities760.17B652.23B630.12B613.36B606.58B433.33B
Stockholders Equity1.00T986.54B989.71B948.52B937.52B755.45B
Cash Flow
Free Cash Flow96.17B150.51B165.40B89.44B188.60B135.22B
Operating Cash Flow157.53B182.59B199.75B142.76B231.79B180.61B
Investing Cash Flow-129.30B-26.07B-137.10B-193.76B-244.39B-112.42B
Financing Cash Flow-121.39B-108.24B-64.03B-69.28B30.28B75.21B

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
82
Outperform
HK$401.67B8.0019.79%23.88%7.67%90.63%
79
Outperform
HK$2.04T14.3813.02%1.83%4.74%73.72%
78
Outperform
$1.52T43.7114.98%38.46%72.44%
74
Outperform
HK$4.58T21.5121.25%0.89%8.88%54.27%
73
Outperform
$1.83T14.8512.97%0.92%5.85%30.65%
65
Neutral
$746.63B16.5723.82%19.20%156.71%
63
Neutral
$33.87B5.80-11.87%1.82%5.31%-18.50%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
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