Alibaba Stock Valuation

BABA -  USA Stock  

USD 87.31  4.68  5.09%

Do you wonder what the value of Alibaba Group Holding is? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Alibaba Group, is its stock price multiplied by the total number of shares outstanding, calculating Alibaba Group's enterprise value requires a different approach. It uses Alibaba Group's balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
Alibaba Group Free Cash Flow is projected to increase significantly based on the last few years of reporting. The past year's Free Cash Flow was at 217.32 Billion. The current year Tangible Asset Value is expected to grow to about 1646 B, whereas Enterprise Value is forecasted to decline to about 571.5 B.
Alibaba Group Holding shows a prevailing Real Value of $121.66 per share. The current price of the firm is $87.31. At this time, the firm appears to be undervalued. Our model approximates the value of Alibaba Group Holding from analyzing the firm fundamentals such as Profit Margin of 15.31 %, current valuation of 181.3 B, and Return On Equity of 11.25 % as well as examining its technical indicators and Probability Of Bankruptcy. In general, we favor taking in undervalued instruments and trading overvalued instruments since, at some point, asset prices and their ongoing real values will blend.
  
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Alibaba Group Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Alibaba Group's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.
Undervalued
Today 87.31
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Please note that Alibaba Group's price fluctuation is very steady at this time. Calculation of the real value of Alibaba Group Holding is based on 3 months time horizon. Increasing Alibaba Group's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Alibaba Group Holding is useful when determining the fair value of the Alibaba stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Alibaba Group. Since Alibaba Group is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Alibaba Stock. However, Alibaba Group's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
121.66
Real Value
127.96
Upside
Estimating the potential upside or downside of Alibaba Group Holding helps investors to forecast how Alibaba stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Alibaba Group more accurately as focusing exclusively on Alibaba Group's fundamentals will not take into account other important factors:
Earnings
Estimates (3)
LowProjected EPSHigh
5.946.587.01
Details
Hype
Prediction
LowEstimated ValueHigh
79.4585.7592.05
Details
17 Analysts
Consensus
LowTarget PriceHigh
140.00229.39407.00
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Alibaba Group's intrinsic value based on its ongoing forecasts of Alibaba Group's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Alibaba Group's closest peers. When choosing an evaluation method for Alibaba Group Holding, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Alibaba Group Investments

743.97 Billion

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Alibaba Valuation Drivers Correlation

Many accounts on the financial statements of Alibaba Group Holding are highly interrelated and sometimes correlated. Consequently, when conducting Alibaba's valuation analysis, one should examine all of the accounts reported to obtain a complete picture of its financial situation. We provide a unique feature to present a conventional correlation table purposely composed against different valuation-related drivers of Alibaba
Click cells to compare fundamentals

Alibaba Valuation Trend

Knowing Alibaba Group's actual value is paramount for traders to make sound investment determinations. Alibaba Group's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Alibaba Group's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Alibaba Group's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Alibaba Market Cap

Alibaba Group Holding is number one stock in market capitalization category among related companies. Market capitalization of Internet Retail industry is currently estimated at about 257.52 Billion. Alibaba Group totals roughly 239.26 Billion in market capitalization claiming about 93% of equities under Internet Retail industry.
Capitalization  Valuation  Total debt  Revenue  Workforce

Alibaba Group Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Alibaba Group's current stock value. Our valuation model uses many indicators to compare Alibaba Group value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Alibaba Group competition to find correlations between indicators driving Alibaba Group's intrinsic value. More Info.
Alibaba Group Holding is rated below average in price to book category among related companies. It is rated second in price to earning category among related companies reporting about  49.44  of Price to Earning per Price to Book. The current year Price to Earnings Ratio is expected to grow to 27.31. The current year Earnings Before Interest Taxes and Depreciation Amortization EBITDA is expected to grow to about 261.5 B. Comparative valuation analysis is a catch-all model that can be used if you cannot value Alibaba Group by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Alibaba Group's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Alibaba Group's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Alibaba Group's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Alibaba Group and how it compares across the competition.

About Alibaba Group Valuation

The equity valuation mechanism determines the current worth of Alibaba Group Holding on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Alibaba Group Holding. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Alibaba Group Holding based exclusively on its fundamental and basic technical indicators. By analyzing Alibaba Group's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Alibaba Group's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Alibaba Group. We calculate exposure to Alibaba Group's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Alibaba Group's related companies.
Last ReportedProjected for 2022
Gross Profit340.5 B367.4 B
Profit Margin 0.19  0.24 
Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to merchants, brands, retailers, and other businesses to engage with their users and customers in the Peoples Republic of China and internationally. The company was incorporated in 1999 and is based in Hangzhou, the Peoples Republic of China. Alibaba Group operates under Internet Retail classification in the United States and is traded on New York Stock Exchange. It employs 258578 people.

Alibaba Group Quarterly Enterprise Value

301.35 Billion

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Alibaba Group Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Alibaba Group does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Quick Ratio1.18
Earnings Quarterly Growth-81.00%
Revenue Growth29.40%
Enterprise Value To Ebitda1.16
Earnings Growth-81.20%
Enterprise Value To Revenue0.22

Alibaba Group Current Valuation Indicators

Valuation refers to the process of determining the present value of Alibaba Group Holding and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Alibaba we look at many different elements of the entity such as Alibaba's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Alibaba Group's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Alibaba Group's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Alibaba Group, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Alibaba Group's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Alibaba Group's worth.
Continue to Trending Equities. Note that the Alibaba Group Holding information on this page should be used as a complementary analysis to other Alibaba Group's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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When running Alibaba Group Holding price analysis, check to measure Alibaba Group's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Alibaba Group is operating at the current time. Most of Alibaba Group's value examination focuses on studying past and present price action to predict the probability of Alibaba Group's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Alibaba Group's price. Additionally, you may evaluate how the addition of Alibaba Group to your portfolios can decrease your overall portfolio volatility.
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Is Alibaba Group's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Alibaba Group. If investors know Alibaba will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Alibaba Group listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Alibaba Group Holding is measured differently than its book value, which is the value of Alibaba that is recorded on the company's balance sheet. Investors also form their own opinion of Alibaba Group's value that differs from its market value or its book value, called intrinsic value, which is Alibaba Group's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Alibaba Group's market value can be influenced by many factors that don't directly affect Alibaba Group's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Alibaba Group's value and its price as these two are different measures arrived at by different means. Investors typically determine Alibaba Group value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Alibaba Group's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.