Key Stats for Alibaba Stock
- Current Price: $107.74
- Target Price (Mid): ~$216
- Street Target: ~$185
- Potential Total Return: ~101%
- Annualized IRR: ~17% / year
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What Happened?
Alibaba (BABA) has missed consensus adjusted EPS in each of its last five reports, and analysts have trimmed the current fiscal year’s revenue forecast. TIKR’s consensus for fiscal 2027 (ending March 2027) revenue has slipped about 2.5% since March 31, from around RMB 1.15 trillion to around RMB 1.12 trillion, with 44 analysts now versus 48 then.
Shares closed at $107.74 on September 29, down 14.1% since March 31 and 26.5% in 2026. Alibaba’s investor relations materials point to technology investment as the main drag on profit, while customer management revenue barely grew on an adjusted basis.
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Technology Spending Rises as Customer Management Revenue Stalls
The June quarter, reported August 20, shows the pattern. Adjusted EPS of RMB 8.52 per ADS missed consensus by about 21%, and TIKR-basis EBITDA fell 14.41% year over year even as it beat estimates by 6.59%. CFO Toby Xu attributed the decline in the company’s own adjusted EBITDA primarily to investment in technology.
In the e-commerce group, revenue rose 4% to RMB 205.9 billion, and quick commerce revenue grew 45% to RMB 53.3 billion, but customer management revenue fell 7%. Xu added, “Excluding the contra revenue impact from the new business development program, customer management revenue would have grown by 1% year-over-year.”
E-commerce adjusted EBITDA held relatively stable at RMB 39.7 billion, so the e-commerce group is not growing its profit fast enough to absorb the technology spending on its own.
The September Quarter Needs EBITDA to More Than Double
On TIKR’s basis, consensus expects September-quarter EBITDA of around RMB 40 billion, up roughly 129% from RMB 17.26 billion a year earlier, though only eight analysts contribute. Adjusted EPS is expected at around RMB 11 per ADS. Xu said the AI Labs and Applications segment’s RMB 13.9 billion adjusted EBITDA loss should narrow as model training and Qwen app marketing become more efficient.
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Cash Flow Estimates Turned Negative as Insiders Split
TIKR’s next-twelve-month levered free cash flow estimate moved from around RMB 48 billion on June 30 to around negative RMB 16 billion on September 29. On an annual basis, the Street does not see positive free cash flow until fiscal 2028. The August placement of 710 million new shares, about 3.7% of the share count, also spreads future earnings across more stock.
On September 27, The Information reported that China’s industry ministry asked companies, including Alibaba and ByteDance, for plans to buy Nvidia (NVDA) RTX Pro 5500 chips, built for high-end professional computers. The ministry told some firms it intends to approve the purchases, but that is a reported plan, not an approval, and the chip’s U.S. export status has not been confirmed.
CFO Toby Xu sold about $1.41 million of stock on September 29, according to an SEC filing reported by Benzinga, which gives no reason for the sale. In August, Chairman Joe Tsai and CEO Eddie Wu bought a combined HK 120million (US15.3 million) of shares on the open market.
TIKR Advanced Model Analysis
- Current Price: $107.74
- Target Price (Mid): ~$216
- Potential Total Return: ~101%
- Annualized IRR: ~17% / year
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The TIKR model’s mid-case, used as the central scenario, values Alibaba at around $216 by March 31, 2031. That is roughly 101% above $107.74, or about 17% a year. For context, TIKR consensus has normalized EPS rising from around RMB 44 per ADS in fiscal 2027 to around RMB 79 in fiscal 2029 before dipping to around RMB 64 in fiscal 2030, and revenue estimates beyond fiscal 2029 come from only four analysts.
The primary risk is that the revenue trims now visible in fiscal 2027 spread to later years, since the miss streak shows estimates running ahead of results. Upside comes if the September quarter ends that streak. The downside comes from further misses or an adverse turn in the pending securities class action, whose allegations are unproven.
Conclusion
The September-quarter report is the next test; Alibaba reported the same quarter on November 25 last year. Adjusted EPS at or above the roughly RMB 11 per ADS consensus would end the five-report miss streak. A sixth miss, alongside further trims to fiscal 2027 revenue estimates, would suggest the stock’s 2026 decline reflects earnings arriving later than analysts expect.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
