Alibaba (BABA) Stock Forecast & Price Target

Alibaba Group Holdings has demonstrated a strong revenue growth trajectory, with FY26 and FY27 revenue estimates raised to RMB 1,028 billion and RMB 1,144 billion, respectively, driven by the robust performance of AliCloud and core e-commerce segments. Recent innovations, including the integration of instant commerce into the Taobao app, have resulted in a 20% increase in Daily Active Users (DAUs), enhancing user engagement and overall traffic to the platform. Moreover, revenue figures for the latest period reached RMB 248 billion, reflecting a 5% year-over-year increase, with notable contributions from the Alibaba China E-commerce Group, which grew 16% year-over-year, and Cloud services, which accelerated 34% year-over-year.

The analysis indicates a negative outlook for Alibaba Group Holdings due to a series of downward adjustments in financial expectations, specifically a reduction in the China Ecommerce Group EBITDA margin from 26% to 23% and a revised FY26 estimated adjusted EBITDA of RMB 184 billion, down from previous projections. The company reported an EBITDA of RMB 17 billion, which fell short of the RMB 19 billion consensus, reflecting the financial strain from ongoing investments in quick commerce that significantly impacted overall profitability. Furthermore, a negative free cash flow of RMB 21.8 billion, driven by expenditures in quick commerce and cloud infrastructure, coupled with a lack of clear guidance on cloud revenue expectations, has introduced uncertainty into Alibaba's financial outlook.