Alibaba Group Holding Ltd. (HK:9988)
:9988
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Alibaba Group Holding Ltd.
(9988)
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Rating:54Neutral
Price Target:
HK$129.00
▼(-2.05% Downside)
Action:Downgraded
Date:05/02/26
The score is held back primarily by weakened cash conversion (TTM free cash flow sharply negative) and clear technical weakness (price below key moving averages with negative MACD). These are partially offset by a strong balance sheet with modest leverage and an earnings-call narrative showing accelerating AI/cloud traction and ambitious targets, though near-term profitability and free cash flow declines remain a major overhang. Valuation is also a headwind given the high P/E and low dividend yield.
Positive Factors
Accelerating cloud growth and market share gains
Sustained high-teens to mid-30s cloud growth with consecutive market-share gains indicates structural demand and competitive scale. A larger share of enterprise cloud spend and stable cloud adjusted EBITA margins support predictable recurring revenue and long-term margin recovery potential.
Negative Factors
Deteriorating free cash flow conversion
Material FCF deterioration and negative TTM free cash flow reduce earnings quality and constrain internal funding for ongoing investments. Persistent weak cash conversion raises risk that reinvestment intensity or working-capital swings will pressure capital returns and margin resilience over the next 2–6 months.
Read all positive and negative factors
Positive Factors
Negative Factors
Accelerating cloud growth and market share gains
Sustained high-teens to mid-30s cloud growth with consecutive market-share gains indicates structural demand and competitive scale. A larger share of enterprise cloud spend and stable cloud adjusted EBITA margins support predictable recurring revenue and long-term margin recovery potential.
Read all positive factors
Alibaba Group Holding Ltd. (9988) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$2.53T
Dividend Yield1.34%
Average Volume (3M)137.35M
Price to Earnings (P/E)2.4
Beta (1Y)1.71
Revenue Growth4.59%
EPS Growth-16.23%
CountryHK
Employees124,320
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)4.99
Shares Outstanding19,193,072,000
10 Day Avg. Volume127,150,115
30 Day Avg. Volume137,353,147
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)2.22
Price to Sales (P/S)2.25
P/FCF Ratio28.69
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
HK$185.53Price Target Upside40.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering27
EPS Forecast (FY)6.46
Revenue Forecast (FY)HK$1.30T
Alibaba Group Holding Ltd. Business Overview & Revenue Model
Company Description
Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China a...
How the Company Makes Money
Alibaba primarily makes money by monetizing commerce activity across its platforms and selling technology services. Its largest revenue streams historically come from (1) China commerce: merchant advertising and marketing services (e.g., performan...
Alibaba Group Holding Ltd. 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 highlights strong and accelerating AI + Cloud momentum (40% cloud growth, sustained triple-digit AI revenue growth, sizeable AI ARR targets and growing MaaS demand), a recovering consumption business on a like-for-like basis (CMR +8) and a healthy cash position with a dividend. Offsetting these positives are significant near-term profitability and cash-flow pressures: total adjusted EBITA declined sharply (-84%), free cash flow was negative (RMB 17.3B), large incremental compute investment needs (potentially 10x 2022 levels) and infrastructure cost inflation. Management frames the deterioration as deliberate, strategic investment to capture a historic AI opportunity and expects margin mix and profitability improvements over the medium term, but near-term financial metrics are pressured.Positive Updates
Group revenue growth
Total consolidated revenue was RMB 243.4 billion, with like-for-like revenue growth of 11% year-over-year (excluding Sun Art and Intime).
Negative Updates
Sharp adjusted EBITA decline at group level
Total adjusted EBITA decreased 84% year-over-year, primarily due to heavy strategic investments in AI/technology businesses, quick commerce and user experience initiatives.
Read all updates
Q4-2026 Updates
Positive
Negative
Group revenue growth
Total consolidated revenue was RMB 243.4 billion, with like-for-like revenue growth of 11% year-over-year (excluding Sun Art and Intime).
Read all positive updates
Company Guidance
Management guided that group revenue grew 11% year‑over‑year to RMB 243.4 billion (11% like‑for‑like excluding Sun Art/Intime), with Cloud Intelligence external revenue accelerating to 40% and AI‑related product revenue—triple‑digit growth for the 11th consecutive quarter—at RMB 9 billion this quarter (annualized run‑rate ~RMB 36 billion / USD 5.3 billion), representing 30% of cloud external revenue and forecast to exceed 50% in about one year; model and application services ARR on the Model Studio/Bailian platform is expected to surpass RMB 10 billion in the June quarter and RMB 30 billion by year‑end (ARR already >RMB 8–10 billion, token consumption >10x since Nov/Dec), cloud adjusted EBITA margin was ~9.1% with management expecting accelerating cloud revenue and margin improvement in 1–2 quarters and material margin uplift over 2–3 years; on consumption, China e‑commerce revenue was RMB 122 billion (+6%) with CMR +1% reported (+8% like‑for‑like), quick commerce revenue rose 57% to RMB 20 billion with order volume 2.7x YoY (non‑food 3x) and UE expected to turn positive by end of FY27 with profitability at scale thereafter; financial posture includes continued heavy AI investment (near‑term free cash flow outflow RMB 17.3 billion vs. operating cash inflow RMB 9.4 billion), net cash of ~USD 38 billion (~USD 59 billion excluding long‑dated debt), a planned ~10x increase in compute capacity vs 2022 (CapEx outlook may exceed prior RMB 380 billion plan), and scaled T‑Head deployment with >60% of certain compute capacity already serving external customers.Alibaba Group Holding Ltd. Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
78
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.02T | 996.35B | 941.17B | 868.69B | 853.06B | 717.29B |
| Gross Profit | 414.37B | 398.06B | 354.85B | 318.99B | 313.61B | 296.08B |
| EBITDA | 129.86B | 207.51B | 164.01B | 153.11B | 128.23B | 217.96B |
| Net Income | 90.61B | 130.11B | 80.01B | 72.78B | 62.25B | 150.58B |
Balance Sheet | ||||||
| Total Assets | 1.88T | 1.80T | 1.76T | 1.75T | 1.70T | 1.69T |
| Cash, Cash Equivalents and Short-Term Investments | 380.62B | 428.09B | 571.03B | 524.47B | 455.08B | 483.44B |
| Total Debt | 262.85B | 248.11B | 205.61B | 195.57B | 176.60B | 181.44B |
| Total Liabilities | 772.70B | 714.12B | 652.23B | 630.12B | 613.36B | 606.58B |
| Stockholders Equity | 1.04T | 1.01T | 986.54B | 989.66B | 948.48B | 937.47B |
Cash Flow | ||||||
| Free Cash Flow | -60.39B | 78.16B | 150.82B | 165.52B | 87.95B | 181.96B |
| Operating Cash Flow | 92.23B | 164.82B | 184.01B | 199.90B | 140.39B | 223.63B |
| Investing Cash Flow | -134.23B | -206.61B | -26.27B | -137.20B | -190.54B | -235.79B |
| Financing Cash Flow | 10.93B | -57.12B | -104.81B | -64.07B | -68.13B | 29.21B |
Alibaba Group Holding Ltd. Technical Analysis
Negative
131.70
Price Trends
129.96
Positive
141.81
Negative
144.88
Negative
Market Momentum
0.64
Positive
49.17
Neutral
24.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9988, the sentiment is Negative. The current price of 131.7 is below the 20-day moving average (MA) of 132.55, above the 50-day MA of 129.96, and below the 200-day MA of 144.88, indicating a neutral trend. The MACD of 0.64 indicates Positive momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 24.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:9988.
Alibaba Group Holding Ltd. Risk Analysis
Alibaba Group Holding Ltd. disclosed 70 risk factors in its most recent earnings report. Alibaba Group Holding Ltd. 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 Ltd. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | HK$33.48B | -17.03 | 11.27% | 3.18% | 26.38% | -53.61% | |
64 Neutral | HK$350.41B | 13.49 | 8.57% | 3.48% | 12.29% | -67.34% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | HK$1.20B | -7.10 | -6.45% | ― | 5.73% | -35.54% | |
54 Neutral | HK$2.53T | 2.38 | 9.95% | 1.34% | 4.59% | -16.23% | |
50 Neutral | HK$511.59B | -23.65 | -13.59% | ― | 8.12% | -166.15% | |
40 Underperform | HK$941.44M | -0.11 | ― | ― | 13.45% | 48.65% |
* Consumer Cyclical Sector Average
HK:9988
Alibaba Group Holding Ltd.
131.90
10.83
8.95%
HK:3690
Meituan
82.85
-54.45
-39.66%
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GOME Retail Holdings
0.01
>-0.01
-40.91%
HK:9618
JD.com, Inc. Class A
127.80
-1.99
-1.54%
HK:9896
MINISO Group Holding Ltd.
27.02
-11.39
-29.64%
HK:9991
Baozun, Inc. Class A
6.73
-1.87
-21.74%
Alibaba Group Holding Ltd. Corporate Events
Alibaba Sets May Board Meeting to Approve Fiscal 2026 Results
Apr 29, 2026
Alibaba Group Holding Ltd. said its board of directors will meet on May 12, 2026 to approve the company’s unaudited financial results for the three months and fiscal year ended March 31, 2026. The company plans to release these results to th...
Alibaba Wins HKEX Approval to Spin Off Infrastructure Assets via SZSE REIT
Apr 27, 2026
Alibaba Group Holding Ltd. has received approval from the Hong Kong Stock Exchange to proceed with a proposed spin-off of certain infrastructure assets via a real estate investment trust listing on the Shenzhen Stock Exchange. The spin-off will ce...
Alibaba Grants New Employee Share Awards Under 2024 Equity Plan
Mar 23, 2026
Alibaba Group has granted share awards linked to 5,902,553 underlying shares, representing about 0.03% of its issued share capital, to certain employees under its 2024 equity incentive plan. The awards, which carry no purchase price and are not su...
Alibaba Bets Heavily on AI and Quick Commerce as Profit Slides in December Quarter
Mar 19, 2026
Alibaba reported unaudited results for the December quarter of 2025, highlighting modest top-line growth and heavy investment in artificial intelligence and consumption-focused initiatives. Group revenue rose 2% year-on-year to RMB284.8 billion, o...
Alibaba Schedules March 2026 Board Meeting to Approve December Quarter Results
Mar 6, 2026
Alibaba Group Holding Limited has announced that its board of directors will convene on March 18, 2026 to review and approve the company’s unaudited financial results for the three months ended December 31, 2025. The company plans to publish...
Alibaba files U.S. Form 13F, revealing scope of its institutional investment holdings
Feb 12, 2026
Alibaba Group Holding Ltd. has disclosed that it filed a Form 13F with the U.S. Securities and Exchange Commission for the quarter ended 31 December 2025, in its capacity as an institutional investment manager. The filing, made under U.S. rules th...
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.