Alibaba Stock Analysis

Company Overview

Alibaba is a global leader in e‑commerce and cloud computing, founded in 1999. It operates China’s largest online shopping platforms (Taobao, Tmall) and the fast‑growing Alibaba Cloud. Investments in digital media, logistics, and international e‑commerce continue to diversify its ecosystem.

Key Statistics

Market Cap

$246.23 B

Revenue (TTM)

$134.51 B

Net Income (TTM)

$16.49 B

Shares Out.

2.27 B

EPS (TTM)

$6.75

P/E Ratio

16.04

Forward P/E

11.10

Dividend Yield

0.90%

Beta

0.23

Ex‑Div Date

Dec 20, 2023

Earnings Date

May 13, 2025

Trading at a mid‐teens P/E, Alibaba appears attractively valued given its dominant e‑commerce foothold and accelerating cloud revenues. A nearly 1% dividend yield and strong free cash flow further bolster the total return profile.

Revenue vs Net Income (FY22–TTM)

Revenue has climbed from ~$85 B in FY22 to $135 B TTM, while net income grew from ~$62 B to $16.5 B—a reflection of operating leverage and investment cycles in cloud and logistics.

Margin Trends (FY22–TTM)

Gross margin dipped slightly from ~41.5% (FY21) to ~38.8% TTM due to mix changes, but operating margin has improved from ~11.3% (FY22) to ~15.1% TTM, driven by cost controls and higher‑margin cloud growth.

Valuation Metrics

At a forward P/E of 11.1 and a PEG under 1.0, Alibaba trades at a discount to global e‑commerce peers, reflecting potential upside as cloud and international initiatives scale.

Balance Sheet Snapshot

With $62 B in cash vs $36 B debt (net cash ~$26 B), Alibaba has ample liquidity to fund R&D, M&A, and share repurchases while weathering macro uncertainties.

52‑Week Stock Performance

The stock traded between $68.4 and $148.4 over the past year, closing near $108.9. Low volatility (beta 0.23) underscores its defensive characteristics amid tech fluctuations.

Risks & Opportunities

Risks

Dependence on Chinese consumer spending and ad market.

Regulatory scrutiny in China and data‑privacy laws.

Intense competition from Pinduoduo, JD.com, and ByteDance.

Opportunities

High‑growth cloud computing segment.

Logistics and new retail (Cainiao) expansion.

International e‑commerce growth in Southeast Asia.

Conclusion

Alibaba’s core e‑commerce dominance, strong free cash flow, and burgeoning cloud business support a positive long‑term outlook. At current valuations, it offers an attractive risk/reward for patient investors.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence or consult a licensed financial advisor.

1. Company Overview

Alibaba Group (NASDAQ: BABA) is a leading Chinese technology conglomerate founded in 1999. Its core business is e‑commerce (Alibaba.com, Taobao, Tmall), complemented by cloud computing (Alibaba Cloud), digital media & entertainment (Youku, Alibaba Pictures) and innovation initiatives (Cainiao logistics, Ant Group joint ventures). Alibaba’s vast ecosystem connects millions of buyers and sellers, underpinned by advanced AI, big‑data analytics and a growing logistics network.

Key Business Segments:

Core Commerce: Online marketplaces in China and international cross‑border platforms
Cloud Computing: IaaS and PaaS services for enterprises across Asia and beyond
Digital Media & Entertainment: Video streaming, digital advertising, and online gaming
Innovation Initiatives & Others: Logistics, local services, fintech partnerships

2. Financial Performance

a. Revenue and Growth

TTM Revenue: $134.51 B
Alibaba delivered $134.5 billion in revenue over the past twelve months, reflecting its dominant position in China’s online retail market and growing contributions from cloud and digital media.

b. Profitability

Net Income (TTM): $16.49 B
EPS (TTM): $6.75
Gross Margin: 38.8%
Operating Margin: 15.1%
Profit Margin: 12.3%

Profitability remains solid, driven by high‑margin cloud services and disciplined cost controls in its e‑commerce operations.

c. Cash Flow

Operating Cash Flow (TTM): $21.83 B
Capital Expenditures (TTM): –$4.40 B
Free Cash Flow (TTM): $17.46 B ($7.69 per share)

Robust free cash flow generation provides flexibility for reinvestment, share buybacks and dividends.

3. Balance Sheet

Cash & Equivalents: $62.10 B
Total Debt: $36.21 B
Net Cash Position: $25.89 B ($11.39 per share)
Equity (Book Value): $149.99 B ($59.26 per share)
Working Capital: $30.21 B

A healthy liquidity cushion and manageable leverage (Debt/Equity 0.24) support ongoing growth investments.

4. Valuation

PE Ratio (TTM): 16.04
Forward PE: 11.10
PS Ratio: 1.93
PB Ratio: 1.84
P/FCF: 14.17
EV/EBITDA: 8.49
EV/FCF: 12.68
PEG Ratio: 0.59

At ~16× earnings and sub‑2× sales, Alibaba trades at a notable discount to growth peers, with a low PEG indicating attractive value if growth sustains.

5. Market Performance

Last Close Price: $108.87
52‑Week Range: $68.36 – $148.43 (+56.1%)
Beta (5Y): 0.23
50‑Day MA: $126.99
200‑Day MA: $98.17
RSI (14‑day): 38.7
Average Volume (20 days): 29.1 M shares
Short Interest: 46.2 M shares (2.33% of float)

A low beta underscores relative stability; recent pullback from the 52‑week high may offer an entry point.

6. Financial Health & Risks

Strengths:

Strong Liquidity: Current Ratio 1.48; Quick Ratio 0.99
Moderate Leverage: Debt/EBITDA 1.31; Interest Coverage ~15.9×
Returns: ROE 10.3%; ROA 5.0%; ROIC 6.9%

Risks:

Regulatory Oversight: Ongoing scrutiny of China’s tech giants could impact operations.
Macroeconomic Slowdown: Weak consumer spending may pressure e‑commerce growth.
Profit Margin Pressure: Intensifying competition in cloud and retail segments.
Bankruptcy Risk Indicators: Altman Z‑Score 2.54; Piotroski F‑Score 6 (moderate risk profile).

7. Conclusion

Pros:

Market leader in China’s e‑commerce with expanding cloud and digital media arms.
Strong free cash flow supports dividends and buybacks.
Attractive valuation multiples relative to growth prospects.

Cons:

Regulatory and geopolitical headwinds add uncertainty.
Consumer spending slowdowns could dampen core commerce growth.
Margins may compress amid intensifying competition.

Final Note:
Alibaba offers a compelling mix of growth, profitability and value, trading at reasonable multiples despite macro and regulatory risks. Long‑term investors bullish on China’s digital economy may find Alibaba’s current valuation attractive, though they should be prepared for intermittent volatility.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.

Alibaba Group Holding Ltd (NYSE: BABA)