Alibaba (BABA) Stock Forecast & Price Target

Alibaba Group Holdings demonstrates a robust financial outlook, bolstered by raised revenue estimates of RMB 1,028 billion and RMB 1,144 billion for FY26 and FY27, respectively, signaling accelerated growth in both its e-commerce core and cloud services. The company reported a revenue of RMB 248 billion for the latest period, reflecting a 5% year-over-year increase, and a more significant 15% growth when excluding disposed assets, surpassing consensus by approximately RMB 3 billion. Additionally, segment performance indicates strong momentum, with Alibaba's core e-commerce group revenue climbing 16% year-over-year, alongside a notable 34% year-over-year acceleration in cloud revenues, underlining the company's potential for market share gains and sustained high growth.

The financial outlook for Alibaba Group Holdings reflects a significant downward revision in expectations, with the adjusted EBITDA estimates for FY26 and FY27 lowered to RMB 184 billion and RMB 262 billion, respectively, due to heightened investments in quick commerce. The company's EBITDA fell short of market consensus at RMB 17 billion, underscoring pressures from these ongoing investments, while the China Ecommerce Group's EBITA margin was conservatively adjusted down to 23% for F2H26 and 28% for FY27. Additionally, the firm faced substantial losses exceeding RMB 36 billion quarterly and negative free cash flow of RMB 21.8 billion, driven by increased spending in both quick commerce initiatives and cloud infrastructure, contributing to broader concerns about financial stability.