Alibaba (BABA) Stock Forecast & Price Target

Alibaba Group Holdings is positioned for substantial revenue growth, with revised estimates for FY26 and FY27 reaching RMB 1,036 billion and RMB 1,154 billion, respectively, driven by robust performance in its core e-commerce and AliCloud segments. The integration of instant commerce into the Taobao app has resulted in a 20% boost in Daily Active Users (DAUs), enhancing user engagement and traffic across the platform, which is likely to further support revenue increases. Additionally, the company reported a significant year-over-year revenue growth of 5%, or 15% when excluding disposed assets, with its China E-commerce Group revenue rising by 16% and Cloud revenue accelerating by 34%, underscoring the strong growth trajectory across its key business areas.

The financial analysis reveals a negative outlook on Alibaba Group Holdings due to a series of adjustments reflecting a decline in expected profitability and cash flow. Specifically, the EBITDA margin for the China Ecommerce Group has been revised downwards to 23%, with overall adjusted EBITDA estimates for FY26 and FY27 set at RMB 184 billion and RMB 262 billion, respectively, primarily due to heightened investments in quick commerce. Additionally, the company's free cash flow has turned negative at RMB 21.8 billion, highlighting significant financial strain from both quick commerce investments and cloud infrastructure spending, which introduces further uncertainty regarding future performance.