Alibaba (BABA) Stock Forecast & Price Target

Alibaba Group Holdings demonstrates a strong growth trajectory, with raised revenue estimates of RMB 1,028 billion for FY26 and RMB 1,144 billion for FY27, reflecting optimism in both its cloud services and core e-commerce businesses. The integration of instant commerce into the Taobao app has resulted in a 20% increase in daily active users (DAUs), enhancing user engagement and traffic across the platform. Additionally, Alibaba reported a 5% year-over-year revenue growth to RMB 248 billion, which surpassed consensus expectations, driven by robust performances in segments such as its China E-commerce Group and Cloud services, which grew 16% and 34% year-over-year, respectively.

The analysis indicates a negative outlook for Alibaba Group Holdings due to conservative adjustments in the expected EBITA margin, which has been revised down to 23% for F2H26/FY27, reflecting concerns over margin recovery. Additionally, the company's EBITDA performance fell short of consensus estimates at RMB 17 billion, primarily driven by ongoing investments in the quick commerce sector, which has also resulted in lowered adjusted EBITDA projections for FY26 and FY27 to RMB 184 billion and RMB 262 billion, respectively. Furthermore, with quarterly losses exceeding RMB 36 billion and negative free cash flow of RMB 21.8 billion attributed to these aggressive investments, the financial stability of the company is increasingly under scrutiny, compounded by uncertainties in cloud revenue growth.