Decent Value Stocks. Analyze the stocks with a good fundamental valuation, while still showing decent profitability, health and growth.


ALIBABA GROUP HOLDING-SP ADR

New York Stock Exchange, Inc. / Consumer Discretionary / Broadline Retail

Fundamental Rating

6

BABA gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 34 industry peers in the Broadline Retail industry. Both the profitability and the financial health of BABA get a neutral evaluation. Nothing too spectacular is happening here. A decent growth rate in combination with a cheap valuation! Better keep an eye on BABA. With these ratings, BABA could be worth investigating further for value investing!.



6

1. Profitability

1.1 Basic Checks

In the past year BABA was profitable.
In the past year BABA had a positive cash flow from operations.
In the past 5 years BABA has always been profitable.
In the past 5 years BABA always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 5.49%, BABA is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
The Return On Equity of BABA (9.89%) is better than 60.61% of its industry peers.
BABA has a better Return On Invested Capital (6.23%) than 63.64% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BABA is significantly below the industry average of 11.22%.
The last Return On Invested Capital (6.23%) for BABA is above the 3 year average (5.01%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 5.49%
ROE 9.89%
ROIC 6.23%
ROA(3y)5.56%
ROA(5y)7.43%
ROE(3y)9.96%
ROE(5y)13.49%
ROIC(3y)5.01%
ROIC(5y)5.32%

1.3 Margins

BABA has a better Profit Margin (10.78%) than 87.88% of its industry peers.
In the last couple of years the Profit Margin of BABA has declined.
The Operating Margin of BABA (13.41%) is better than 90.91% of its industry peers.
BABA's Operating Margin has declined in the last couple of years.
BABA's Gross Margin of 37.78% is in line compared to the rest of the industry. BABA outperforms 42.42% of its industry peers.
BABA's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 13.41%
PM (TTM) 10.78%
GM 37.78%
OM growth 3Y-13.82%
OM growth 5Y-15.72%
PM growth 3Y-34.19%
PM growth 5Y-20.06%
GM growth 3Y-6.53%
GM growth 5Y-8.53%

More info and screens

6

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), BABA is destroying value.
Compared to 1 year ago, BABA has less shares outstanding
Compared to 5 years ago, BABA has about the same amount of shares outstanding.
The debt/assets ratio for BABA is higher compared to a year ago.

2.2 Solvency

BABA has an Altman-Z score of 2.36. This is not the best score and indicates that BABA is in the grey zone with still only limited risk for bankruptcy at the moment.
BABA's Altman-Z score of 2.36 is fine compared to the rest of the industry. BABA outperforms 63.64% of its industry peers.
The Debt to FCF ratio of BABA is 0.98, which is an excellent value as it means it would take BABA, only 0.98 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 0.98, BABA is doing good in the industry, outperforming 75.76% of the companies in the same industry.
BABA has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.14, BABA is doing good in the industry, outperforming 63.64% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.14
Debt/FCF 0.98
Altman-Z 2.36
ROIC/WACC0.77
WACC8.05%

2.3 Liquidity

BABA has a Current Ratio of 1.80. This is a normal value and indicates that BABA is financially healthy and should not expect problems in meeting its short term obligations.
BABA has a Current ratio (1.80) which is comparable to the rest of the industry.
BABA has a Quick Ratio of 1.80. This is a normal value and indicates that BABA is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of BABA (1.80) is better than 69.70% of its industry peers.
Industry RankSector Rank
Current Ratio 1.8
Quick Ratio 1.8

More info and screens

5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 20.98% over the past year.
Measured over the past years, BABA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.68% on average per year.
Looking at the last year, BABA shows a small growth in Revenue. The Revenue has grown by 7.28% in the last year.
BABA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.26% yearly.
EPS 1Y (TTM)20.98%
EPS 3Y0.95%
EPS 5Y10.68%
EPS growth Q2Q-1.51%
Revenue 1Y (TTM)7.28%
Revenue growth 3Y19.45%
Revenue growth 5Y28.26%
Revenue growth Q2Q5.08%

3.2 Future

Based on estimates for the next years, BABA will show a small growth in Earnings Per Share. The EPS will grow by 7.13% on average per year.
BABA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.25% yearly.
EPS Next Y17.92%
EPS Next 2Y8.87%
EPS Next 3Y10.07%
EPS Next 5Y7.13%
Revenue Next Year8.15%
Revenue Next 2Y8.04%
Revenue Next 3Y7.88%
Revenue Next 5Y7.25%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

More info and screens

9

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 7.98, which indicates a rather cheap valuation of BABA.
Based on the Price/Earnings ratio, BABA is valued cheaply inside the industry as 90.91% of the companies are valued more expensively.
BABA is valuated cheaply when we compare the Price/Earnings ratio to 24.75, which is the current average of the S&P500 Index.
BABA is valuated cheaply with a Price/Forward Earnings ratio of 7.73.
BABA's Price/Forward Earnings ratio is rather cheap when compared to the industry. BABA is cheaper than 84.85% of the companies in the same industry.
BABA is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.23, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 7.98
Fwd PE 7.73

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, BABA is valued cheaper than 100.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, BABA is valued cheaply inside the industry as 87.88% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 7.17
EV/EBITDA 2.39

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of BABA may justify a higher PE ratio.
PEG (NY)0.45
PEG (5Y)0.75
EPS Next 2Y8.87%
EPS Next 3Y10.07%

More info and screens

2

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.42%, BABA has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.41, BABA pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.42, BABA pays less dividend than the S&P500 average, which is at 2.45.
Industry RankSector Rank
Dividend Yield 1.42%

5.2 History

BABA does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

DPN/A
EPS Next 2Y8.87%
EPS Next 3Y10.07%

More info and screens