Alibaba (BABA) Stock Forecast & Price Target

Alibaba Group Holdings has shown promising growth potential, with raised revenue estimates for FY26 and FY27 projected at RMB 1,036 billion and RMB 1,154 billion, respectively, indicating an accelerated growth trajectory in its core e-commerce and cloud segments. The integration of instant commerce into the Taobao app has resulted in a significant 20% increase in daily active users, enhancing user engagement and driving higher traffic on the platform. Additionally, revenue growth of 5% year-over-year, along with strong segment performance—such as a 16% increase in Alibaba China E-commerce Group revenue and a 34% uptick in its cloud business—further underscores a robust financial outlook for the company.

The analysis of Alibaba Group Holding's financial performance reveals significant concerns, highlighted by a reduction in the EBITA margin forecast for its China Ecommerce Group from 26% to 23%, reflecting a more conservative outlook on margin recovery. Furthermore, the company's EBITDA for the recent quarter fell to RMB 17 billion, trailing behind market expectations of RMB 19 billion due to ongoing investments in quick commerce, resulting in lowered adjusted EBITDA estimates for FY26 and FY27. Additionally, the report signals increased uncertainty due to the lack of cloud guidance and slower customer management revenue (CMR) growth, exacerbated by a substantial quarterly loss exceeding RMB 36 billion and negative free cash flow of RMB 21.8 billion, primarily attributed to quick commerce and cloud infrastructure expenditures.