April 2, 2024 Alibaba (baba) a leading Chinese company displays Strong Financial Performance with Robust Revenue Growth and Low Debt-to-Equity Ratio; Presents 51% Upside Potential

Market Capitalization:
Alibaba Group’s market size is $182.2 billion USD.

Stock Price:
The current price of Alibaba’s (BABA) stocks is $72.88 USD.

Intrinsic, DCF, and Relative Value:
The company’s stocks are undervalued, currently trading 35% below its intrinsic value ($112.44 USD), 36% below the DCF value ($113.23 USD), and 35% under the relative value ($111.66 USD).

Analyst Price Target:
Compared to the average Wall Street analyst price target, Alibaba stocks present a 51% growth potential.

ROE and ROIC Track Record:
Over the last three years, Alibaba has maintained a positive average ROE (Return on Equity) of 10%, demonstrating efficient conversion of equity into net income. The ROIC (Return on Invested Capital) also remains positive at 11% for the past 12 months and has seen an increase from 8% to 11% over the last three years.

Financial Performance:
Alibaba reported positive net and operating income for the past year. The company’s revenue growth stood at 7% over this period and is projected to grow by 9% per year over the next three years.

Declining ROE:
Despite positive trends, Alibaba’s ROE dropped from 18% to 10% over the last three years.

Solvency Position:
In terms of solvency, Alibaba’s short-term assets ($807B CNY) are greater than short-term liabilities ($449B CNY), and their long-term assets ($2T CNY) outweigh long-term liabilities ($810B CNY).

Gross Profit & Free Cash Flow:
The company reported positive gross profit and free cash flow in the past year.

Risk Indicators:
Alibaba has a low Altman Z-Score of 1.2 and a significantly low debt-to-equity (D/E) ratio of 0.14.

Net Debt Status:
Interestingly, Alibaba sits on negative net debt, which signifies they hold more cash and short-term investments ($614B CNY) than their total debt ($140B CNY).