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Alibaba
(NYSE:BABA)
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Rating:59Neutral
Price Target:
$104.00
â–¼(-12.93% Downside)
Action:Reiterated
Date:08/27/26
Overall score reflects strong AI + Cloud growth narrative and a conservatively levered balance sheet, offset by the most significant risk: sharply negative free cash flow and near-term profitability compression amid elevated CapEx. Technical signals and valuation are neutral and do not materially improve the risk/reward profile.
Positive Factors
Cloud Growth and Scaling Margins
Rapid cloud growth combined with improving segment margins indicates stronger scale economics and increasing enterprise adoption. This can make cloud a more durable earnings driver, while improving pricing power and utilization support better profitability as infrastructure investment matures.
Negative Factors
Deeply Negative Free Cash Flow
Large investment outflows are currently overwhelming operating cash generation, reducing the cash available for shareholders and other priorities. If elevated AI infrastructure spending persists longer than expected, weak cash conversion could constrain capital allocation and increase dependence on external funding.
Read all positive and negative factors
Positive Factors
Negative Factors
Cloud Growth and Scaling Margins
Rapid cloud growth combined with improving segment margins indicates stronger scale economics and increasing enterprise adoption. This can make cloud a more durable earnings driver, while improving pricing power and utilization support better profitability as infrastructure investment matures.
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
$248.19B
Dividend Yield1.05%
Average Volume (3M)8.51M
Price to Earnings (P/E)21.5
Beta (1Y)0.99
Revenue Growth7.76%
EPS Growth-49.08%
CountryUS
Employees132,165
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)31.44
Shares Outstanding2,487,744,900
10 Day Avg. Volume8,677,760
30 Day Avg. Volume8,514,289
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 Cap0.88
Enterprise Value/Revenue0.21
Enterprise Value/Gross Profit0.55
Enterprise Value/Ebitda1.42
Forecast
1Y Price Target
$190.83Price Target Upside59.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)43.76
Revenue Forecast (FY)$1.12T
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 earns revenue through a combination of (1) commerce-related services provided to merchants and brands on its marketplaces, (2) cloud computing services, and (3) other digital services within its broader ecosystem.
1) Commerce (c...
Alibaba Earnings Call Summary
Earnings Call Date:Aug 20, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Dec 01, 2026
Earnings Call Sentiment Positive
The call highlights very strong operational momentum in AI and cloud: 45% cloud revenue growth, triple-digit AI product growth with a RMB 49.5 billion annualized run rate, MaaS ARR acceleration, broad adoption of proprietary chips and a thriving Qwen ecosystem. These growth drivers are contrasted with near-term profitability and cash flow headwinds — total adjusted EBITDA down 30%, GAAP net income down 75%, large negative free cash flow and heavy, lumpy CapEx to build AI infrastructure. Management presents a confident long-term narrative (full-stack AI, proprietary silicon, pricing power in a supply-constrained market) and clear paths to improving margins and ROIC, but investors must weigh near-term cash outflows and segment losses against durable secular upside in AI + Cloud.Positive Updates
Strong Group Revenue Growth
Total group revenue rose 9% year-over-year to RMB 269 billion in the quarter, driven by strength in cloud and quick commerce businesses.
Negative Updates
Decline in Consolidated Adjusted EBITDA
Total adjusted EBITDA decreased 30% YoY to RMB 27.3 billion, primarily due to increased investments in technology despite cloud improvements.
Read all updates
Q1-2027 Updates
Positive
Negative
Strong Group Revenue Growth
Total group revenue rose 9% year-over-year to RMB 269 billion in the quarter, driven by strength in cloud and quick commerce businesses.
Read all positive updates
Company Guidance
Management guided that AI + Cloud will remain the primary growth engine and that cloud revenue growth—already accelerating to 45% year‑over‑year this quarter—should continue to accelerate with cloud adjusted EBITDA margin expanding sequentially (reported ~11.6–12% this quarter); AI‑related product revenue was RMB 12.4 billion this quarter (annualized run‑rate ~RMB 49.5 billion / ~USD 7.3 billion) and now represents 35% of external cloud revenue, MaaS ARR has surpassed RMB 16 billion (management reiterated a year‑end target of ~RMB 30 billion), and management expects next‑quarter AI annualized revenue to approach USD 10 billion; they reiterated a long‑term cloud target of RMB 100 billion external revenue by 2030 with gross margin potential of ~20%, noted compute demand will outstrip supply for the foreseeable future, and signaled continued heavy CapEx (this quarter ~RMB 67–67.7 billion; 3‑year plan RMB 380 billion with ~RMB 190 billion spent to date) with servers expected to breakeven in ~3 years (potentially 2.5 years) and deliver positive FCF thereafter, while near‑term cash metrics reflect higher investment (operating cash flow up 11% to RMB 22.9 billion; free cash flow outflow RMB 44.7 billion) but a strong balance sheet (net cash ~USD 30.7 billion, alternative basis ~USD 46.5 billion) and ongoing share repurchases (USD 162 billion disclosed this quarter).Alibaba Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
78
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.04T | 1.02T | 996.35B | 941.17B | 868.69B | 853.06B |
| Gross Profit | 398.21B | 407.53B | 398.06B | 354.85B | 318.99B | 313.61B |
| EBITDA | 152.68B | 186.30B | 190.17B | 164.01B | 153.11B | 128.23B |
| Net Income | 73.53B | 103.59B | 130.11B | 80.01B | 72.78B | 62.25B |
Balance Sheet | ||||||
| Total Assets | 1.96T | 1.90T | 1.81T | 1.77T | 1.75T | 1.70T |
| Cash, Cash Equivalents and Short-Term Investments | 428.43B | 357.59B | 464.77B | 602.17B | 557.62B | 491.06B |
| Total Debt | 266.62B | 259.02B | 248.49B | 205.69B | 195.63B | 176.85B |
| Total Liabilities | 848.52B | 780.37B | 715.21B | 652.46B | 630.33B | 614.25B |
| Stockholders Equity | 1.05T | 1.06T | 1.01T | 986.89B | 990.03B | 949.90B |
Cash Flow | ||||||
| Free Cash Flow | -77.47B | -50.72B | 78.16B | 150.82B | 165.52B | 87.95B |
| Operating Cash Flow | 78.02B | 76.21B | 164.82B | 184.01B | 199.90B | 140.39B |
| Investing Cash Flow | -105.15B | -67.34B | -206.61B | -26.27B | -137.20B | -190.54B |
| Financing Cash Flow | -7.61B | -20.57B | -57.12B | -104.81B | -64.07B | -68.13B |
Alibaba Technical Analysis
Negative
119.44
Price Trends
112.41
Negative
113.06
Negative
127.12
Negative
Market Momentum
-2.19
Positive
29.93
Positive
6.57
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 119.44 is above the 20-day moving average (MA) of 107.88, above the 50-day MA of 112.41, and below the 200-day MA of 127.12, indicating a bearish trend. The MACD of -2.19 indicates Positive momentum. The RSI at 29.93 is Positive, neither overbought nor oversold. The STOCH value of 6.57 is Positive, 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 1 New Risks
1.
Changes to our shareholder return initiatives may adversely affect the trading prices of our ADSs and Shares. Q1, 2024
Alibaba Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $112.51B | 7.90 | 21.97% | ― | 13.53% | -2.42% | |
73 Outperform | $2.68T | 19.68 | 30.50% | ― | 15.77% | 88.63% | |
70 Outperform | $91.77B | 49.26 | 26.54% | 0.19% | 46.01% | -9.25% | |
65 Neutral | $45.71B | 27.54 | 13.51% | 10.18% | 43.06% | 32.91% | |
62 Neutral | $34.75B | 15.78 | 6.63% | 3.94% | 7.23% | -57.76% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $248.19B | 21.50 | 7.04% | 1.05% | 7.76% | -49.08% |
* Consumer Cyclical Sector Average
BABA
Alibaba
99.64
-78.21
-43.97%
AMZN
Amazon
248.00
21.03
9.27%
MELI
Mercadolibre
1,810.15
-472.17
-20.69%
JD
JD
25.36
-7.69
-23.26%
SE
Sea
74.63
-85.47
-53.39%
PDD
PDD Holdings
79.04
-58.72
-42.62%
Alibaba Corporate Events
Alibaba details September 2026 equity movements in Hong Kong filing
Oct 7, 2026
Alibaba Group Holding Limited is a leading China-based technology and e-commerce conglomerate, operating digital marketplaces, cloud computing services and related financial and logistics infrastructure. The company is primarily listed on the Hong...
Alibaba Slightly Expands Share Base on September 29, 2026 Through Incentive Plan Issuances
Sep 29, 2026
Alibaba Group Holding Limited reported changes to its share capital in filings with the Hong Kong Stock Exchange and the U.S. Securities and Exchange Commission dated September 29, 2026. The disclosure comes via a Form 6‑K and a Next Day Dis...
Alibaba Shareholders Back Capital Mandates, Board Elections and Auditors at 2026 AGM
Sep 22, 2026
At its annual general meeting held on September 22, 2026, Alibaba Group Holding Limited reported that shareholders approved a suite of ordinary resolutions covering capital management, board composition and audit oversight. The meeting was conduct...
Alibaba Expands Equity Base with HK$112.7 Placement of 710 Million New Shares
Sep 4, 2026
On September 4, 2026, Alibaba filed a Form 6‑K in the U.S. to furnish its Hong Kong‑mandated monthly return for August 2026, detailing movements in its authorised and issued share capital and confirming compliance with public float req...
Alibaba Raises HK$80 Billion in Hong Kong Share Placement to Fund AI and Cloud Expansion
Aug 26, 2026
Alibaba Group Holding Limited, a global AI‑ and cloud‑focused technology and commerce company listed in the U.S. and Hong Kong, leverages its Qwen large language and multimodal models to power a range of enterprise and consumer service...
Alibaba Issues 710 Million New Shares in Hong Kong Placement, Expands Share Capital in Late August 2026
Aug 26, 2026
On August 26, 2026, Alibaba reported to U.S. regulators that, as a Hong Kong-listed issuer, it had filed a Next Day Disclosure Return with the Hong Kong Stock Exchange detailing changes in its share capital. The filing, signed by company secretary...
Alibaba Adjusts Exchange Terms on Zero Coupon Bonds After Alibaba Health Dividend Approval
Aug 14, 2026
On August 14, 2026, Alibaba Group Holding Limited announced an adjustment to the exchange terms of its HK$12.023 billion zero coupon exchangeable bonds due 2032, which are referenced to ordinary shares of Alibaba Health Information Technology Limi...
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.