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Alibaba Group Holding Ltd ADR BABA

Morningstar Rating
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Stock XNYS Rating as of
$72.37 −1.80 (2.43%)
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As of Delayed Price Post-Trading: $72.64 +0.26
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Company Report

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Alibaba May Increase Dividend Payout to Improve Capital Return to Shareholders

Chelsey Tam

Alibaba is losing market share to PDD Holdings, or PDD, and Douyin in the China e-commerce business, and we don't see a quick fix in the near term. Alibaba's number of annual active consumers in the China retail marketplace was surpassed by PDD in the fiscal year ended March 2021. Meanwhile, Douyin has gained share from Alibaba especially in the beauty and apparel categories in recent years, and entered the traditional search-based e-commerce space, competing directly with Alibaba. The number of annual active consumers at Alibaba is close to the ceiling in China. Alibaba's gross merchandise volume to China's online retail sales of goods ratio was 62% in the year ended March 2023 at Alibaba, down from 72% in the year-ago period. We believe Alibaba's marketplace monetization rates will decline in the long run, due to mix-shift toward Taobao which has lower take rate compared with Tmall, and more competition.

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Price vs Fair Value

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BABA is trading within a range we consider fairly valued.
Price
$74.17
Fair Value
$79.00
Uncertainty
High
1-Star Price
$259.30
5-Star Price
$98.30
Economic Moat
Vkxk
Capital Allocation
Yntggdht

Bulls Say, Bears Say

Bulls

Alibaba is able to maintain or increase its gross merchandise volume share in China's e-commerce space, demonstrating its ability to execute its turnaround strategy.

Bears

Alibaba's gross merchandise volume share in China decreases faster than our expectation as competitors such as Douyin successfully enter the search-based e-commerce business.

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Trading Information

Previous Close Price
$74.17
Day Range
$72.35–73.55
52-Week Range
$66.63–102.50
Bid/Ask
$72.50 / $72.65
Market Cap
$175.00 Bil
Volume/Avg
11.9 Mil / 16.5 Mil

Key Statistics

Price/Earnings (Normalized)
8.54
Price/Sales
1.43
Dividend Yield (Trailing)
2.70%
Dividend Yield (Forward)
2.70%
Total Yield
9.51%

Company Profile

Alibaba is the world’s largest online and mobile commerce company as measured by gross merchandise volume. It operates China’s online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer). The China commerce retail division is the most valuable cash flow-generating business at Alibaba. Additional revenue sources include China commerce wholesale, international commerce retail/wholesale, local consumer services, cloud computing, digital media and entertainment platforms, Cainiao logistics services, and innovation initiatives/other.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Large Value
Total Number of Employees
204,891
Website
https://www.alibabagroup.com

Competitors

Valuation

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Metric
BABA
03690
00700
Price/Earnings (Normalized)
 8.5427.8420.43
Price/Book Value
 1.304.243.77
Price/Sales
 1.432.345.34
Price/Cash Flow
 6.8724.4617.00
Price/Earnings
BABA
03690
00700

Financial Strength

Metric
BABA
03690
00700
Quick Ratio
 1.551.571.30
Current Ratio
 1.791.821.47
Interest Coverage
 6.6710.2713.41
Quick Ratio
BABA
03690
00700

Profitability

Metric
BABA
03690
00700
Return on Assets (Normalized)
 4.42%8.68%10.08%
Return on Equity (Normalized)
 7.83%16.49%20.37%
Return on Invested Capital (Normalized)
 7.04%11.89%12.97%
Return on Assets
BABA
03690
00700
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