ALIBABA GROUP HOLDING-SP ADR (BABA) Stock Fundamental Analysis
NYSE:BABA - New York Stock Exchange, Inc. - US01609W1027 - ADR - Currency: USD
Overall BABA gets a fundamental rating of 6 out of 10. We evaluated BABA against 31 industry peers in the Broadline Retail industry. BABA has an average financial health and profitability rating. BABA is not valued too expensively and it also shows a decent growth rate.
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
With a decent Return On Assets value of 6.49%, BABA is doing good in the industry, outperforming 70.97% of the companies in the same industry.
BABA has a Return On Equity of 12.02%. This is in the better half of the industry: BABA outperforms 67.74% of its industry peers.
BABA has a Return On Invested Capital (7.60%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for BABA is significantly below the industry average of 11.80%.
The 3 year average ROIC (6.45%) for BABA is below the current ROIC(7.60%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | 12.02% | ||
| ROIC | 7.6% |
ROA(3y)4.1%
ROA(5y)6.51%
ROE(3y)7.31%
ROE(5y)11.55%
ROIC(3y)6.45%
ROIC(5y)6.42%
1.3 Margins
Looking at the Profit Margin, with a value of 12.26%, BABA belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
In the last couple of years the Profit Margin of BABA has declined.
BABA's Operating Margin of 13.50% is amongst the best of the industry. BABA outperforms 87.10% of its industry peers.
BABA's Operating Margin has declined in the last couple of years.
BABA has a Gross Margin (38.81%) which is in line with its industry peers.
BABA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.5% | ||
| PM (TTM) | 12.26% | ||
| GM | 38.81% |
OM growth 3Y1.1%
OM growth 5Y-3.71%
PM growth 3Y-26.05%
PM growth 5Y-18.28%
GM growth 3Y-3.16%
GM growth 5Y-3.83%
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
The number of shares outstanding for BABA has been reduced compared to 5 years ago.
Compared to 1 year ago, BABA has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.87 indicates that BABA is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.87, BABA is doing good in the industry, outperforming 67.74% of the companies in the same industry.
The Debt to FCF ratio of BABA is 2.69, which is a good value as it means it would take BABA, 2.69 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of BABA (2.69) is better than 70.97% of its industry peers.
BABA has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.21, BABA is doing good in the industry, outperforming 61.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 2.69 | ||
| Altman-Z | 2.87 |
ROIC/WACC0.8
WACC9.55%
2.3 Liquidity
A Current Ratio of 1.48 indicates that BABA should not have too much problems paying its short term obligations.
The Current ratio of BABA (1.48) is comparable to the rest of the industry.
A Quick Ratio of 1.48 indicates that BABA should not have too much problems paying its short term obligations.
The Quick ratio of BABA (1.48) is better than 64.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.48 | ||
| Quick Ratio | 1.48 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.56% 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 10.09% on average per year.
Looking at the last year, BABA shows a small growth in Revenue. The Revenue has grown by 5.85% in the last year.
Measured over the past years, BABA shows a very strong growth in Revenue. The Revenue has been growing by 20.09% on average per year.
EPS 1Y (TTM)0.56%
EPS 3Y-1.58%
EPS 5Y10.09%
EPS Q2Q%12.76%
Revenue 1Y (TTM)5.85%
Revenue growth 3Y9.48%
Revenue growth 5Y20.09%
Sales Q2Q%7.61%
3.2 Future
The Earnings Per Share is expected to grow by 1.20% on average over the next years.
Based on estimates for the next years, BABA will show a small growth in Revenue. The Revenue will grow by 3.77% on average per year.
EPS Next Y8.12%
EPS Next 2Y11.35%
EPS Next 3Y11.55%
EPS Next 5Y1.2%
Revenue Next Year6.21%
Revenue Next 2Y6.58%
Revenue Next 3Y7.25%
Revenue Next 5Y3.77%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.51, the valuation of BABA can be described as correct.
70.97% of the companies in the same industry are more expensive than BABA, based on the Price/Earnings ratio.
BABA is valuated rather cheaply when we compare the Price/Earnings ratio to 28.22, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 11.87, which indicates a very decent valuation of BABA.
80.65% of the companies in the same industry are more expensive than BABA, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of BABA to the average of the S&P500 Index (20.86), we can say BABA is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.51 | ||
| Fwd PE | 11.87 |
4.2 Price Multiples
77.42% of the companies in the same industry are more expensive than BABA, based on the Enterprise Value to EBITDA ratio.
BABA's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. BABA is cheaper than 61.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.38 | ||
| EV/EBITDA | 8.92 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
BABA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.79
PEG (5Y)1.44
EPS Next 2Y11.35%
EPS Next 3Y11.55%
5. Dividend
5.1 Amount
With a yearly dividend of 0.82%, BABA is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.98, BABA pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, BABA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
BABA is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
14.91% of the earnings are spent on dividend by BABA. This is a low number and sustainable payout ratio.
DP14.91%
EPS Next 2Y11.35%
EPS Next 3Y11.55%
125.76
+5.23 (+4.34%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners14.49%
Inst Owner Change0.62%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap300.27B
Analysts85.71
Price Target162.54 (29.25%)
Short Float %1.89%
Short Ratio1.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
Yearly Dividend0.99
Dividend Growth(5Y)N/A
DP14.91%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.1%
Min EPS beat(2)-0.76%
Max EPS beat(2)6.96%
EPS beat(4)2
Avg EPS beat(4)2.33%
Min EPS beat(4)-2.68%
Max EPS beat(4)6.96%
EPS beat(8)4
Avg EPS beat(8)4.35%
EPS beat(12)8
Avg EPS beat(12)6.4%
EPS beat(16)10
Avg EPS beat(16)4.48%
Revenue beat(2)0
Avg Revenue beat(2)-2.36%
Min Revenue beat(2)-2.95%
Max Revenue beat(2)-1.77%
Revenue beat(4)0
Avg Revenue beat(4)-2.49%
Min Revenue beat(4)-4.25%
Max Revenue beat(4)-0.97%
Revenue beat(8)1
Avg Revenue beat(8)-1.89%
Revenue beat(12)2
Avg Revenue beat(12)-1.6%
Revenue beat(16)3
Avg Revenue beat(16)-1.78%
PT rev (1m)3.37%
PT rev (3m)30.82%
EPS NQ rev (1m)-1.19%
EPS NQ rev (3m)3.94%
EPS NY rev (1m)0.04%
EPS NY rev (3m)4.71%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)-1.49%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.51 | ||
| Fwd PE | 11.87 | ||
| P/S | 2.22 | ||
| P/FCF | 25.38 | ||
| P/OCF | 13.69 | ||
| P/B | 2.18 | ||
| P/tB | 3.01 | ||
| EV/EBITDA | 8.92 |
EPS(TTM)8.67
EY6.89%
EPS(NY)10.6
Fwd EY8.43%
FCF(TTM)4.96
FCFY3.94%
OCF(TTM)9.18
OCFY7.3%
SpS56.59
BVpS57.71
TBVpS41.76
PEG (NY)1.79
PEG (5Y)1.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | 12.02% | ||
| ROCE | 9.48% | ||
| ROIC | 7.6% | ||
| ROICexc | 11.25% | ||
| ROICexgc | 15.92% | ||
| OM | 13.5% | ||
| PM (TTM) | 12.26% | ||
| GM | 38.81% | ||
| FCFM | 8.76% |
ROA(3y)4.1%
ROA(5y)6.51%
ROE(3y)7.31%
ROE(5y)11.55%
ROIC(3y)6.45%
ROIC(5y)6.42%
ROICexc(3y)10.57%
ROICexc(5y)10.27%
ROICexgc(3y)16.93%
ROICexgc(5y)17.44%
ROCE(3y)8.04%
ROCE(5y)8%
ROICexcg growth 3Y9.15%
ROICexcg growth 5Y-1.21%
ROICexc growth 3Y13.34%
ROICexc growth 5Y8.21%
OM growth 3Y1.1%
OM growth 5Y-3.71%
PM growth 3Y-26.05%
PM growth 5Y-18.28%
GM growth 3Y-3.16%
GM growth 5Y-3.83%
F-Score7
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 2.69 | ||
| Debt/EBITDA | 1.19 | ||
| Cap/Depr | 164.83% | ||
| Cap/Sales | 7.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 90% | ||
| Profit Quality | 71.43% | ||
| Current Ratio | 1.48 | ||
| Quick Ratio | 1.48 | ||
| Altman-Z | 2.87 |
F-Score7
WACC9.55%
ROIC/WACC0.8
Cap/Depr(3y)86.04%
Cap/Depr(5y)91.05%
Cap/Sales(3y)4.57%
Cap/Sales(5y)5.73%
Profit Quality(3y)186.71%
Profit Quality(5y)155.24%
High Growth Momentum
Growth
EPS 1Y (TTM)0.56%
EPS 3Y-1.58%
EPS 5Y10.09%
EPS Q2Q%12.76%
EPS Next Y8.12%
EPS Next 2Y11.35%
EPS Next 3Y11.55%
EPS Next 5Y1.2%
Revenue 1Y (TTM)5.85%
Revenue growth 3Y9.48%
Revenue growth 5Y20.09%
Sales Q2Q%7.61%
Revenue Next Year6.21%
Revenue Next 2Y6.58%
Revenue Next 3Y7.25%
Revenue Next 5Y3.77%
EBIT growth 1Y6.58%
EBIT growth 3Y10.68%
EBIT growth 5Y15.63%
EBIT Next Year25.85%
EBIT Next 3Y17.85%
EBIT Next 5Y12.3%
FCF growth 1Y-21.62%
FCF growth 3Y-7.42%
FCF growth 5Y8.11%
OCF growth 1Y-1.23%
OCF growth 3Y-7.64%
OCF growth 5Y3.88%