ALIBABA GROUP HOLDING-SP ADR (BABA) Stock Fundamental Analysis
NYSE:BABA - New York Stock Exchange, Inc. - US01609W1027 - ADR - Currency: USD
We assign a fundamental rating of 4 out of 10 to BABA. BABA was compared to 28 industry peers in the Broadline Retail industry. BABA has only an average score on both its financial health and profitability. BABA has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year BABA was profitable.
In the past 5 years BABA has always been profitable.
BABA had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of BABA (7.18%) is better than 67.86% of its industry peers.
BABA has a Return On Equity of 12.82%. This is in the better half of the industry: BABA outperforms 71.43% of its industry peers.
The Return On Invested Capital of BABA (8.29%) is better than 67.86% of its industry peers.
BABA had an Average Return On Invested Capital over the past 3 years of 7.11%. This is below the industry average of 11.59%.
The 3 year average ROIC (7.11%) for BABA is below the current ROIC(8.29%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.18% | ||
| ROE | 12.82% | ||
| ROIC | 8.29% |
ROA(3y)5.28%
ROA(5y)5.68%
ROE(3y)9.41%
ROE(5y)10.16%
ROIC(3y)7.11%
ROIC(5y)6.48%
1.3 Margins
BABA's Profit Margin of 12.99% is amongst the best of the industry. BABA outperforms 89.29% of its industry peers.
BABA's Profit Margin has declined in the last couple of years.
The Operating Margin of BABA (14.69%) is better than 89.29% of its industry peers.
In the last couple of years the Operating Margin of BABA has declined.
BABA has a worse Gross Margin (39.95%) than 67.86% of its industry peers.
BABA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.69% | ||
| PM (TTM) | 12.99% | ||
| GM | 39.95% |
OM growth 3Y9.46%
OM growth 5Y-4.76%
PM growth 3Y21.4%
PM growth 5Y-15%
GM growth 3Y2.73%
GM growth 5Y-2.4%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), BABA is destroying value.
BABA has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, BABA has less 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 2.87. 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.
Looking at the Altman-Z score, with a value of 2.87, BABA is in the better half of the industry, outperforming 60.71% of the companies in the same industry.
BABA has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
BABA has a Debt to Equity ratio of 0.21. This is comparable to the rest of the industry: BABA outperforms 57.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.87 |
ROIC/WACC0.96
WACC8.63%
2.3 Liquidity
BABA has a Current Ratio of 1.55. This is a normal value and indicates that BABA is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.55, BABA is in line with its industry, outperforming 50.00% of the companies in the same industry.
A Quick Ratio of 1.55 indicates that BABA should not have too much problems paying its short term obligations.
The Quick ratio of BABA (1.55) is better than 67.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.55 |
3. Growth
3.1 Past
BABA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.31%.
The Earnings Per Share has been growing slightly by 4.28% on average over the past years.
BABA shows a small growth in Revenue. In the last year, the Revenue has grown by 5.86%.
Measured over the past years, BABA shows a quite strong growth in Revenue. The Revenue has been growing by 14.35% on average per year.
EPS 1Y (TTM)5.31%
EPS 3Y7.52%
EPS 5Y4.28%
EPS Q2Q%23.47%
Revenue 1Y (TTM)5.86%
Revenue growth 3Y5.31%
Revenue growth 5Y14.35%
Sales Q2Q%6.57%
3.2 Future
BABA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.11% yearly.
The Revenue is expected to grow by 5.40% on average over the next years.
EPS Next Y7.29%
EPS Next 2Y11.17%
EPS Next 3Y11%
EPS Next 5Y1.11%
Revenue Next Year6.32%
Revenue Next 2Y7.25%
Revenue Next 3Y7.68%
Revenue Next 5Y5.4%
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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 11.85, the valuation of BABA can be described as very reasonable.
82.14% of the companies in the same industry are more expensive than BABA, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.52, BABA is valued rather cheaply.
BABA is valuated reasonably with a Price/Forward Earnings ratio of 11.05.
Based on the Price/Forward Earnings ratio, BABA is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
BABA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.58.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.85 | ||
| Fwd PE | 11.05 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
BABA's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.63
PEG (5Y)2.77
EPS Next 2Y11.17%
EPS Next 3Y11%
5. Dividend
5.1 Amount
With a yearly dividend of 0.97%, BABA is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 12.99, BABA pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.97, BABA pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
5.2 History
BABA has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
DP0%
EPS Next 2Y11.17%
EPS Next 3Y11%
108.22
+1.5 (+1.41%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners15.65%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap258.15B
Analysts85.53
Price Target163.11 (50.72%)
Short Float %1.17%
Short Ratio2.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
Yearly Dividend1.01
Dividend Growth(5Y)N/A
DP0%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.92%
Min EPS beat(2)-5.13%
Max EPS beat(2)6.96%
EPS beat(4)2
Avg EPS beat(4)1.71%
Min EPS beat(4)-5.13%
Max EPS beat(4)6.96%
EPS beat(8)3
Avg EPS beat(8)2.27%
EPS beat(12)7
Avg EPS beat(12)5.43%
EPS beat(16)10
Avg EPS beat(16)4.72%
Revenue beat(2)0
Avg Revenue beat(2)-2.03%
Min Revenue beat(2)-2.29%
Max Revenue beat(2)-1.77%
Revenue beat(4)0
Avg Revenue beat(4)-2.82%
Min Revenue beat(4)-4.25%
Max Revenue beat(4)-1.77%
Revenue beat(8)1
Avg Revenue beat(8)-1.82%
Revenue beat(12)1
Avg Revenue beat(12)-1.82%
Revenue beat(16)2
Avg Revenue beat(16)-2.03%
PT rev (1m)-0.33%
PT rev (3m)0.19%
EPS NQ rev (1m)-3.72%
EPS NQ rev (3m)-11.45%
EPS NY rev (1m)-7.39%
EPS NY rev (3m)-8.03%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)-1.8%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.85 | ||
| Fwd PE | 11.05 | ||
| P/S | 1.86 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.83 | ||
| P/tB | 2.52 | ||
| EV/EBITDA | N/A |
EPS(TTM)9.13
EY8.44%
EPS(NY)9.79
Fwd EY9.05%
FCF(TTM)N/A
FCFYN/A
OCF(TTM)N/A
OCFYN/A
SpS58.27
BVpS59.06
TBVpS42.9
PEG (NY)1.63
PEG (5Y)2.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.18% | ||
| ROE | 12.82% | ||
| ROCE | 10.69% | ||
| ROIC | 8.29% | ||
| ROICexc | 12.06% | ||
| ROICexgc | 17.07% | ||
| OM | 14.69% | ||
| PM (TTM) | 12.99% | ||
| GM | 39.95% | ||
| FCFM | N/A |
ROA(3y)5.28%
ROA(5y)5.68%
ROE(3y)9.41%
ROE(5y)10.16%
ROIC(3y)7.11%
ROIC(5y)6.48%
ROICexc(3y)11.36%
ROICexc(5y)10.25%
ROICexgc(3y)17.38%
ROICexgc(5y)16.27%
ROCE(3y)9.18%
ROCE(5y)8.35%
ROICexcg growth 3Y6.77%
ROICexcg growth 5Y-3.12%
ROICexc growth 3Y11.73%
ROICexc growth 5Y2.88%
OM growth 3Y9.46%
OM growth 5Y-4.76%
PM growth 3Y21.4%
PM growth 5Y-15%
GM growth 3Y2.73%
GM growth 5Y-2.4%
F-ScoreN/A
Asset Turnover0.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.55 | ||
| Altman-Z | 2.87 |
F-ScoreN/A
WACC8.63%
ROIC/WACC0.96
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)5.31%
EPS 3Y7.52%
EPS 5Y4.28%
EPS Q2Q%23.47%
EPS Next Y7.29%
EPS Next 2Y11.17%
EPS Next 3Y11%
EPS Next 5Y1.11%
Revenue 1Y (TTM)5.86%
Revenue growth 3Y5.31%
Revenue growth 5Y14.35%
Sales Q2Q%6.57%
Revenue Next Year6.32%
Revenue Next 2Y7.25%
Revenue Next 3Y7.68%
Revenue Next 5Y5.4%
EBIT growth 1Y18.12%
EBIT growth 3Y15.27%
EBIT growth 5Y8.9%
EBIT Next Year37.87%
EBIT Next 3Y21.96%
EBIT Next 5Y12.57%
FCF growth 1YN/A
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1YN/A
OCF growth 3YN/A
OCF growth 5YN/A