Alibaba (BABA) Stock Forecast & Price Target

Alibaba Group Holdings has demonstrated strong financial momentum, with revenue for the latest period reaching RMB 248 billion, reflecting a year-over-year growth of 5%, or 15% when excluding disposed assets, which exceeded consensus expectations. The company's core e-commerce segment, particularly the China E-commerce Group, showed impressive growth of 16% year-over-year, while its cloud computing division accelerated at a rate of 34% year-over-year, underscoring the diversified growth across its various segments. Additionally, the integration of quick commerce into the Taobao app has resulted in a 20% increase in daily active users (DAUs), enhancing user engagement and driving higher traffic, further supporting the positive outlook for Alibaba's revenue growth in FY26 and FY27, now estimated at RMB 1,036 billion and RMB 1,154 billion, respectively.

The financial outlook for Alibaba Group Holdings reflects a cautious stance, primarily due to lowered EBITA margin projections for its China Ecommerce Group, which have been adjusted downward from 26% to 23% for the second half of FY26 and from 34% to 28% for FY27. Furthermore, the company's EBITDA performance showed a decline to RMB 17 billion, which fell short of the RMB 19 billion consensus, mainly due to continued investments in quick commerce that have led to increased operational costs. Additionally, Alibaba reported a significant negative cash flow of RMB 21.8 billion and high quarterly losses exceeding RMB 36 billion, raising concerns about sustained profitability amidst rising investment expenditures in key business areas.