One-glance verdict
Undervalued
$304.90 our estimate vs market $113.24
Wall Street consensus: $187.07 (-38.6% lower than our fair-value estimate)
63% below our estimate, below the bear case
Fundamentals snapshot
Alibaba Group Holding Limited
BABA · NYQ · Consumer Cyclical · Internet Retail
Current price
$113.24
52-week range
$91.99 - $192.67
Market cap
$281.47B
Balance sheet
Healthy
6.09x Adequate
Net cash $17.76B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 8.1% last year.
- Reward Free cash flow was positive in 3/10 years.
- Risk Stock trades 802.5% above its 5-year average P/E.
- Risk Operating margin compressed from 11.9% to 7.3% over 3 years.
What this company does
Alibaba Group Holding Limited
Alibaba is a giant Chinese technology company best known for its online shopping websites, Taobao and Tmall, which are similar to Amazon and eBay. The company makes most of its money by helping millions of other businesses sell their products on these sites and from its large cloud computing division that rents out digital processing power. This matters because Alibaba's vast business, which includes everything from e-commerce to logistics (the system of getting products from seller to buyer), is often seen as a reflection of consumer health in China.
How the company got here
Alibaba was started in 1999 by Jack Ma, a former English teacher, and 17 co-founders in a small apartment in Hangzhou, China. Their goal was to create an online marketplace to connect Chinese manufacturers with buyers around the world, which became Alibaba.com. The company grew by launching new platforms, including Taobao in 2003, a site for individuals and small businesses to sell to each other, and Tmall in 2008, which allowed established brands to sell directly to consumers. In 2014, Alibaba had the largest initial public offering (IPO, the first time a company sells its stock to the public) in U.S. history at the time. Over the years, it has expanded into cloud computing, digital media, and logistics, becoming a massive technology conglomerate.
What it actually does
Alibaba is a massive technology company that provides the online spaces and tools for millions of businesses to sell their products to customers in China and around the world. Think of it like a giant digital shopping mall operator that also provides the underlying technology for payments, logistics, and cloud computing. Everyday shoppers would recognize its e-commerce websites like Taobao, similar to eBay, and Tmall, which is more like an online mall for official brands. The company also operates international shopping sites like AliExpress and provides cloud computing services that power other businesses' websites and applications.
Alibaba China E-Commerce Group
This is Alibaba's core business and largest segment, focused on online shopping within China. It includes Taobao, a massive marketplace where individuals and small businesses sell a huge variety of goods, much like eBay. It also runs Tmall, a platform for larger, established brands to sell directly to consumers, ensuring authenticity. This segment also includes 1688.com, a site for businesses to buy goods in bulk from manufacturers within China, and Xianyu, a popular app for people to sell used or secondhand items to each other.
Alibaba International Digital Commerce Group
This division handles e-commerce for customers outside of China. Its most well-known platform is AliExpress, which allows international buyers to purchase products directly from small businesses and manufacturers in China. The group also includes Lazada, a major online shopping destination in Southeast Asia, and Trendyol, a leading e-commerce platform in Turkey. This segment connects Chinese sellers with a global customer base and represents a significant area of growth for the company.
Cloud Intelligence Group
This is Alibaba's technology powerhouse, providing cloud computing services to other businesses. Often called Alibaba Cloud, it offers services like data storage, processing power, and artificial intelligence tools that other companies can rent instead of building their own expensive infrastructure. It is one of the largest cloud providers in the world, especially in the Asia-Pacific region. This segment is a small but very fast-growing part of the company, making money by charging businesses for using its powerful computing resources.
All Others
This segment is a collection of Alibaba's other businesses that support its main e-commerce and cloud operations. It includes Cainiao, a logistics company that helps deliver the billions of packages ordered on Alibaba's sites. It also contains Amap, a popular mobile map and navigation service in China. Other businesses in this group are Youku, an online video platform similar to YouTube, and Freshippo (also known as Hema), a chain of grocery stores that blends online and offline shopping.
What management is betting on now
Alibaba's leadership is currently focused on two main priorities: putting the user first in its e-commerce businesses and driving everything with artificial intelligence (AI). For e-commerce, this means improving the customer experience with better prices and services to compete more effectively. For technology, the company is investing heavily in its Cloud Intelligence Group to become a leader in AI, developing its own powerful AI models (like Qwen) and providing the essential cloud infrastructure for other businesses to build their own AI applications. This dual focus aims to strengthen its core business while capturing the massive growth opportunity in the AI era.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$148.40B
Net income
$15.02B
Diluted EPS
0.80
Operating cash flow
$11.05B
Free cash flow
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Sources
Revenue
$137.30B
Net income
$17.93B
Diluted EPS
0.92
Operating cash flow
$22.53B
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $304.90 vs current price $113.24
Wall Street consensus is the average analyst price target: $187.07 (-38.6% lower than our fair-value estimate).
Our most-likely fair value is $304.90 a share — about 169.3% above today's price of $113.24, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $17.8B - more cash than debt. Interest coverage 6.1x.
Net debt
$-17.76B
Interest coverage
6.09x
Alibaba Group Holding Limited's profit covers its interest bill about 6.1 times over.
Healthy
Worse cushion
Baseline
Better cushion
BABA
BASELINE
Alibaba Group Holding Limited
Total debt $39.72B Interest coverage 6.09x This is the baseline the peer rows are being compared against.
Total debt $251.64B Interest coverage 35.17x +477% vs BABA Carries about 5.8x more debt cushion than BABA.
Total debt $15.69B Interest coverage 1.32x -78% vs BABA Carries about 4.6x less debt cushion than BABA.
Total debt $70.31B Interest coverage 18.49x +203% vs BABA Carries about 3.0x more debt cushion than BABA.
Total debt $13.21B Interest coverage 20.01x +228% vs BABA Carries about 3.3x more debt cushion than BABA.
What you should know
The case for and against BABA
3 Rewards
2 Risks
Rewards
-
Revenue grew 8.1% last year.
-
Free cash flow was positive in 3/10 years.
-
Dividend yield is 0.9% with 4-year payout history.
Risks
-
Stock trades 802.5% above its 5-year average P/E.
-
Operating margin compressed from 11.9% to 7.3% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
25.62x
Forward P/E
12.12x
P/B
1.69x
P/S
0.27x
EV/EBITDA
2.11x
PEG ratio
0.53x
Profitability
How much profit each dollar creates
Gross margin
38.2%
Operating margin
7.3%
Net margin
7.0%
ROE
6.4%
ROA
1.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.24x
Current ratio
1.36x
Quick ratio
0.72x
Total debt
$39.72B
Total cash
$57.48B
Growth
How the business has been compounding
Revenue TTM
$542.54B
Revenue 5Y CAGR
2.5%
EPS TTM
4.42
EPS 5Y CAGR
17.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$87.96B
Free CF TTM
$-7.56B
FCF margin
-1.4%
Dividend
Shareholder payout
Yield
0.9%
Payout ratio
24.0%
Last ex-div date
2026-06-11