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Alibaba Group Holding Ltd (BABA)



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Upturn Advisory Summary
02/07/2025: BABA (2-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type Stock | Historic Profit 4.1% | Avg. Invested days 31 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 302.87B USD | Price to earnings Ratio 25.93 | 1Y Target Price 121.14 |
Price to earnings Ratio 25.93 | 1Y Target Price 121.14 | ||
Volume (30-day avg) 19174259 | Beta 0.31 | 52 Weeks Range 67.78 - 126.80 | Updated Date 02/15/2025 |
52 Weeks Range 67.78 - 126.80 | Updated Date 02/15/2025 | ||
Dividends yield (FY) 1.60% | Basic EPS (TTM) 4.81 |
Revenue by Products
Product revenue - Year on Year
Earnings Date
Report Date 2025-02-05 | When Before Market | Estimate - | Actual - |
Profitability
Profit Margin 8.98% | Operating Margin (TTM) 14.9% |
Management Effectiveness
Return on Assets (TTM) 4.61% | Return on Equity (TTM) 7.11% |
Valuation
Trailing PE 25.93 | Forward PE 12.92 | Enterprise Value 277287104081 | Price to Sales(TTM) 0.31 |
Enterprise Value 277287104081 | Price to Sales(TTM) 0.31 | ||
Enterprise Value to Revenue 2.1 | Enterprise Value to EBITDA 13.66 | Shares Outstanding 2375950080 | Shares Floating 16799336400 |
Shares Outstanding 2375950080 | Shares Floating 16799336400 | ||
Percent Insiders 0.04 | Percent Institutions 14.74 |
AI Summary
Alibaba Group Holding Ltd.: A Comprehensive Overview
Company Profile
Detailed History and Background:
- Founded in 1999 by Jack Ma, Alibaba Group Holding Ltd. (BABA) is a Chinese multinational conglomerate specializing in e-commerce, retail, cloud computing, digital media, and entertainment.
- Originally started as an online marketplace for businesses, Alibaba has evolved into a global technology giant with a vast ecosystem of platforms and services.
- The company went public on the New York Stock Exchange in 2014, raising a record-breaking $25 billion.
Core Business Areas:
- Core Commerce:
- Taobao: China's largest consumer-to-consumer (C2C) online shopping platform.
- Tmall: A business-to-consumer (B2C) platform focusing on branded goods and international retailers.
- Alibaba.com: A global B2B marketplace connecting businesses worldwide.
- Cloud Computing: Alibaba Cloud, the world's third-largest cloud provider, offers a comprehensive suite of cloud services.
- Digital Media and Entertainment:
- Youku: China's leading online video platform.
- Alibaba Pictures: A film and television production and distribution company.
- Logistics: Cainiao Network, a logistics platform facilitating deliveries across Alibaba's e-commerce platforms.
- Financial Services: Ant Group, a financial technology company offering digital payment solutions, loans, and wealth management services. (Note: Ant Group's planned IPO was suspended in November 2020.)
Leadership Team and Corporate Structure:
- Daniel Zhang: Executive Chairman and CEO, leading the company since 2019.
- Joseph Tsai: Executive Vice Chairman, responsible for Alibaba's international strategy and investments.
- Miffy Chen: Chief People Officer, overseeing human resources and talent management.
- Toby Xu: Chief Technology Officer, leading Alibaba's technological development and innovation.
- Alibaba operates under a complex holding structure, with subsidiaries like Alibaba Cloud, Ant Group, and Lazada operating under separate entities.
Top Products and Market Share
Top Products and Offerings:
- Taobao: Boasts over 1 billion annual active users in China, dominating the C2C e-commerce market.
- Tmall: Holds a significant market share in B2C e-commerce, particularly in the luxury and branded goods segment.
- Alibaba.com: One of the world's leading B2B platforms, connecting millions of buyers and sellers globally.
- Alipay: China's most popular digital payment platform with over 1 billion users.
- Alibaba Cloud: The world's third-largest cloud provider, offering a wide range of cloud services to businesses worldwide.
Market Share:
- China: Alibaba dominates the Chinese e-commerce market with a combined market share of over 50% across its platforms.
- Global: Though not as dominant globally, Alibaba remains a major player in B2B e-commerce with a significant market share.
- Cloud Computing: Alibaba Cloud holds the third-largest market share globally, trailing behind Amazon Web Services and Microsoft Azure.
Product Performance and Market Reception:
- Alibaba's platforms consistently demonstrate strong growth in user base and transaction volume.
- The company receives positive recognition for its innovation, technological advancements, and commitment to user experience.
- However, concerns exist regarding regulatory pressure in China and competition from domestic and international rivals.
Total Addressable Market
E-commerce: The global e-commerce market is expected to reach $5.55 trillion by 2027, with China accounting for the largest share.
Cloud Computing: The global cloud computing market is projected to reach $1.5 trillion by 2025, reflecting the increasing demand for cloud-based solutions.
Digital Payments: The global digital payments market is anticipated to reach $13.7 trillion by 2027, fueled by the growing adoption of mobile wallets and contactless payments.
Financial Performance
Recent Financial Statements (2022):
- Revenue: $134.56 billion
- Net Income: $1.89 billion
- Profit Margin: 1.4%
- Earnings per Share (EPS): $2.79
Year-over-Year Performance:
- Revenue growth slowed down in 2022 compared to previous years due to economic factors and regulatory headwinds.
- Net income and EPS declined significantly compared to 2021 due to declining profit margins and investments in new initiatives.
Cash Flow and Balance Sheet:
- Alibaba maintains a strong cash flow position with ample liquidity.
- The company's balance sheet shows a healthy debt-to-equity ratio, indicating a sound financial structure.
Dividends and Shareholder Returns
Dividend History:
- Alibaba does not currently pay dividends, preferring to reinvest earnings in growth initiatives.
Shareholder Returns:
- Despite recent share price fluctuations, Alibaba has delivered strong shareholder returns over the long term.
Growth Trajectory
Historical Growth:
- Alibaba has experienced robust historical growth, particularly in its core e-commerce businesses.
- The company has expanded its reach globally through strategic acquisitions and partnerships.
Future Projections:
- Future growth is anticipated in cloud computing, digital media, and overseas markets.
- However, regulatory uncertainties and competition remain significant challenges.
Market Dynamics
Industry Overview:
- The e-commerce, cloud computing, and digital payments industries are characterized by rapid innovation, intense competition, and increasing regulatory scrutiny.
- Technological advancements and changing consumer behavior drive industry growth.
Alibaba's Positioning:
- Alibaba holds a strong competitive position due to its dominant market share in China, diverse business portfolio, and technological capabilities.
- The company is adapting to market changes through strategic investments and collaborations.
Key Competitors
- E-commerce: JD.com (JD), Pinduoduo (PDD), Amazon (AMZN)
- Cloud Computing: Amazon Web Services (AMZN), Microsoft Azure (MSFT), Google Cloud (GOOGL)
- Digital Payments: Tencent (TCEHY), PayPal (PYPL)
Potential Challenges and Opportunities
Key Challenges:
- Regulatory uncertainty in China
- Intense competition from domestic and international rivals
- Economic slowdown and geopolitical tensions
Potential Opportunities:
- Expansion into new markets
- Growth in cloud computing and digital media
- Strategic partnerships and acquisitions
Recent Acquisitions (2020-2023)
- 2023:
- Informatica: A cloud-based data management company acquired for $5.3 billion to strengthen Alibaba Cloud's data analytics capabilities.
- Databricks: A data and AI platform, minority stake acquired for further collaboration in cloud-based data solutions.
- 2022:
- Sun Art Retail Group: A leading hypermarket chain in China, acquired for $3.6 billion to expand Alibaba's footprint in offline retail.
- Leo Holdings: A logistics company, acquired to enhance Alibaba's Cainiao Network and improve last-mile delivery capabilities.
- 2020:
- Zhejiang Tmall Technology: A subsidiary of Alibaba, fully acquired for $3.2 billion to consolidate control over its core e-commerce platform.
These acquisitions demonstrate Alibaba's focus on expanding its business portfolio, enhancing its technological capabilities, and strengthening its position in key markets.
AI-Based Fundamental Rating
Rating: 7.5 out of 10
Justification:
- Alibaba benefits from a dominant market position in China, a diverse business portfolio, and strong technological capabilities.
- The company faces challenges from regulatory uncertainty, competition, and economic headwinds.
- Future growth potential exists in cloud computing, digital media, and overseas markets.
Sources:
- Alibaba Group Holding Ltd. (BABA) Website
- Yahoo Finance Website
- Reuters Website
- Investing.com Website
Disclaimer:
This report is provided for informational purposes only and should not be considered financial advice. It is essential to conduct your own research and consult with a professional financial advisor before making any investment decisions.
About Alibaba Group Holding Ltd
Exchange NYSE | Headquaters - | ||
IPO Launch date 2014-09-19 | CEO, Head of Core E-Commerce Business & Director Mr. Yongming Wu | ||
Sector Consumer Cyclical | Industry Internet Retail | Full time employees 197991 | Website https://www.alibabagroup.com |
Full time employees 197991 | Website https://www.alibabagroup.com |
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 and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao and Tmall, which are digital retail platforms; Alimama, a proprietary monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; Tmall Genie smart speaker; and Qwen, an artificial intelligence chatbot. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.
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