Alibaba (BABA) Stock Forecast & Price Target

Alibaba Group Holdings demonstrates a robust financial outlook with revised revenue estimates for FY26 and FY27, projected at RMB 1,036 billion and RMB 1,154 billion, respectively, indicating strong growth potential in both its cloud computing and core e-commerce sectors. The company's revenue for the latest quarter reached RMB 248 billion, reflecting a year-over-year increase of 5%, or 15% when excluding disposed assets, which surpassed analyst consensus expectations by approximately RMB 3 billion. Additionally, the integration of instant commerce into the Taobao app has led to a notable 20% rise in daily active users, enhancing user engagement and driving traffic across Alibaba's platforms.

The negative outlook on Alibaba Gr Holdings's stock stems primarily from a conservative adjustment to its China Ecommerce Group EBITA margins, which have been reduced to 23% for F2H26 and 28% for FY27, reflecting a cautious stance on margin recovery. Additionally, the company reported an EBITDA of RMB 17 billion, falling short of the RMB 19 billion consensus, driven by ongoing investments in quick commerce, which have also led to lowered adjusted EBITDA estimates for FY26 and FY27 to RMB 184 billion and RMB 262 billion, respectively. The significant quarterly loss exceeding RMB 36 billion, negative free cash flow of RMB 21.8 billion attributed to investments in quick commerce and increased cloud infrastructure spending, further underscore the financial challenges the company faces.