Alibaba Stock Analysis (NYSE:BABA)

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$102.95 $0.49 (0.48%) BABA stock closing price Feb 24, 2017 (Closing)
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Updated on : Feb 24, 2017
previous close
BABA 103 (0%)
S&P 500 2367.3 (0%)
Closing Price On: Feb 24, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Commerce
Sector :
5 Quarter Revenue
Revenue Growth
Compared to the industry
Operating Profit
Operating Margin:
Sector Average:
5 Quarter Net Profit
Net Margins
LTM Margin
Compared to the industry
Cash Flow
Operating cash flow:
Net Income:
Recent Growth
Operating Margins
Net Margins
Cash Flow
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
Industry PS :
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
Return on Equity:
Free Cash Flow Margin:
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Alibaba Analysis Video

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Alibaba’s revenue has climbed ever higher as the company puts all its efforts to expand its topline. This has led to massive infrastructure creation causing Alibaba’s assets to baloon. Alibaba’s stock analysis shows that while Alibaba's revenue growth makes the stock attractive, its expensive valuations make it risky. And unlike other fast growing ecommerce firms Alibaba has solid profit margins.

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Alibaba Group Holding Ltd Stock Rating (2.9/5)

Should you buy BABA stock?

  • Alibaba sales grew by 43.8% year on year in 2017 Q3.
  • The TTM operating margin was good at 30% for Alibaba.
  • Net margins stood at a healthy 26.6% (average) for Alibaba in the Trailing Twelve Months.
  • The company has an operating cash flow which is 2 times the net income.
  • Alibaba generates a high return on invested capital of 14.4%.
  • The LTM ROE of 14% for Alibaba is attractive.
  • The company has a good Free Cash Flow (FCF) margin of 67.8%.

Should you sell BABA stock?

  • Trading at a PE ratio of 42.2, BABA stock is overvalued in comparison to industry average multiple of 19.7.
  • The company is trading at a price to sales multiple of 12, which is overvalued in comparison to the Internet Commerce industry average multiple of 0.8.

Comments on this video and Alibaba stock

Alibaba’s stock price has fluctuated also based on the perceived strengths and weaknesses of the Chinese economy as majority of its revenues come from China. Alibaba stock price history shows that the stock saw a steep decline in 2015 when the concerns around Chinese economy were at its peak. The stock later recovered when the concerns around Chinese economy receded. Alibaba has managed a very high revenue growth rate in spite of its size. Alibaba is also expanding in to areas which will boost profits.

Alibaba PE ratio chart shows that the stock is expensive. Alibaba is also expanding in to cloud computing through Aliyun and payments through Ant Financials.