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Alibaba Group Holding Ltd ADR BABA

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Stock XNYS Rating as of
$71.88 −0.51 (0.70%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Alibaba Earnings: Cloud Spinoff Halt a Surprise, Size and Timing of Capital Returns Uncertain

Chelsey Tam

We are surprised that Alibaba will no longer fully spin off the Cloud Intelligence Group and we see larger uncertainty around the size and timeline of capital returns to shareholders. We leave Alibaba’s forecasts and fair value estimate unchanged. Although Alibaba is still undervalued, we now prefer JD.com over Alibaba as we think the former is more likely to turn around next year. Alibaba de-emphasizes the importance of gross merchandise volume, or GMV, which leads us to think Alibaba is not confident about its GMV growth in the future. Meanwhile, JD.com guided for 2024 GMV growth to be higher than the retail sales of consumer goods growth next year. In the September quarter, there was a modest decline in Taobao and Tmall online paid GMV, but a high-single-digit GMV growth at JD.com.

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Price vs Fair Value

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BABA is trading at a 43% discount.
Price
$72.38
Fair Value
$146.00
Uncertainty
High
1-Star Price
$373.10
5-Star Price
$32.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Gross merchandise volume per annual active user was CNY 8,833 for the year ended March 2022 for Alibaba, higher than CNY 3,285 in 2021 for Pinduoduo and CNY 5,905 in 2021 for JD.com.

Bears

Expansion of other e-commerce players could slow Alibaba's growth. Pinduoduo's active buyers have started to exceed Alibaba's since December 2020.

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Trading Information

Previous Close Price
$72.39
Day Range
$71.86–72.95
52-Week Range
$71.90–120.32
Bid/Ask
$71.88 / $71.89
Market Cap
$183.23 Bil
Volume/Avg
22.0 Mil / 14.7 Mil

Key Statistics

Price/Earnings (Normalized)
8.11
Price/Sales
1.45
Dividend Yield
—
Dividend Yield (Forward)
—
Total Yield
5.92%

Company Profile

Alibaba is the world’s largest online and mobile commerce company as measured by gross merchandise volume (CNY 8.3 trillion for the fiscal year ended March 2022). It operates China’s online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer). Alibaba's China commerce retail division accounted for 67% of revenue in the year ended March 2022. Additional revenue sources include China commerce wholesale (2%), international commerce retail/wholesale (5%/2%), local consumer services (5%), cloud computing (9%), digital media and entertainment platforms (4%), Cainiao logistics services (5%), and innovation initiatives/other (1%).
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Large Core
Total Number of Employees
224,955
Website
https://www.alibabagroup.com

Competitors

Valuation

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Metric
BABA
03690
JD
Price/Earnings (Normalized)
 8.1163.738.51
Price/Book Value
 1.303.331.30
Price/Sales
 1.451.810.27
Price/Cash Flow
 6.2014.915.01
Price/Earnings
BABA
03690
JD

Financial Strength

Metric
BABA
03690
JD
Quick Ratio
 1.851.401.02
Current Ratio
 1.941.751.36
Interest Coverage
 —7.8110.96
Quick Ratio
BABA
03690
JD

Profitability

Metric
BABA
03690
JD
Return on Assets (Normalized)
 9.20%3.06%5.84%
Return on Equity (Normalized)
 16.37%5.79%15.82%
Return on Invested Capital (Normalized)
 11.30%4.40%9.19%
Return on Assets
BABA
03690
JD

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