Alibaba Group (BABA) Last Update 3/3/21
Related: EBAY GOOG AMZN AKAM
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
Alibaba Group
$322.56
Yours
Trefis Price
N/A
$223
Market
 
Top Drivers for Period
Key Drivers
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

Alibaba Group Company

VALUATION HIGHLIGHTS

  1. China Retail constitutes 66% of the Trefis price estimate for Alibaba Group's stock.
  2. China Wholesale & Other constitutes 9% of the Trefis price estimate for Alibaba Group's stock.

WHAT HAS CHANGED?

  1. Latest Earnings
Alibaba's revenue for the quarter (ended Dec) of RMB 221B ($33.9B) grew 37%, mainly driven by robust growth in its China commerce retail and cloud computing businesses, and also highlighting the continued recovery. Annual active consumers on China retail marketplaces reached 779 million for the twelve months period ended December 31, 2020, an increase of 22 million from the twelve months period ended September 30, 2020. Mobile MAUs on China retail marketplaces reached 902 million in December 2020, an increase of 21 million over September 2020. Income from operations was RMB 49B ($7.5B), an increase of 24% y-o-y. Adjusted EBITDA, increased 22% y-o-y to RMB 68.4B ($10.5B).

  1. Alibaba Recorded $99 Billion in Sales During Major Chinese Shopping Event
Known as 618 because it falls on June 18, the festival was being closely watched for signs about the health of the consumer in the world’s second-largest economy, as it looks to recover from the coronavirus pandemic. Alibaba's gross merchandise value (GMV) stood at 698.2 billion yuan ($98.52 billion). GMV is the total value of all orders for products and services placed on the company’s online platform, regardless of whether the goods are sold, delivered, or returned.

  1. Secondary Listing of Stock on Hong Kong Exchange
Alibaba completed a secondary listing of its stock on the Hong Kong exchange in November 2019. Part of the deal also included a lock-up for insiders and Softbank (who owns over 25% of the company) for 90 days. While the bulk of Alibaba shares will remain on NYSE, the company seemed to be looking to provide Asian investors more exposure in light of the potentially protracted U.S.- China trade war. Alibaba raised $13 billion from the offering which could be further used to drive user growth and engagement.

BUSINESS SUMMARY

China Commerce (fiscal 2020 revenue of $47 billion, 65% of total revenue): Segment revenues are derived from retail e-commerce and associated marketing services in China.

Digital Media & Innovation Initiatives (fiscal 2020 revenue of ~$5 billion, 7% of total revenue): Segment revenues are derived from content subscription, software subscription, and merchant advertising offerings.

China Wholesale & Other (fiscal 2020 revenue of ~$10 billion, 14% of total revenue): Segment revenues are derived from wholesale commerce and logistics services, primarily driven by Chinese consumption.

International Commerce (fiscal 2020 revenue of ~$5 billion, 7% of total revenue): Segment revenues are derived from retail and wholesale operations as well as from advertising services outside China.

Cloud Computing (fiscal 2020 revenue of ~$6 billion, 8% of total revenue): Segment revenues are derived based on customers' duration and usage of Alibaba's service.