Alibaba Group Holding Limited American Depositary Shares each representing eight Ordinary share (BABA)

FairStock Score: 44/100 — MIXED

Key Financials

Strengths

• Conservative balance sheet with debt-to-equity of just 0.26, providing financial flexibility
• Established organization with 1,28,197 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($83) with negative 58% margin of safety—limited downside protection
• Anemic revenue growth of 1.7% for a company of this size limits long-term upside
• Altman Z-Score of 1.0 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Alibaba Group Holding Limited American Depositary Shares each representing eight Ordinary share is a mega-cap consumer cyclical company valued at $324.3 billion. The business generates $1.0 trillion in annual revenue with a 1.6% net margin. From a quality standpoint, Alibaba shows solid Piotroski F-Score of 6/9 and distressed Altman Z-Score of 1.0 warrants caution. On valuation, the stock is reasonably priced at 23.2x earnings, with trades above its Graham Number with a negative 58% margin. Growth dynamics show revenue growing at 1.7% and profit growth of -66.7%. Our composite FairStock Score of 44/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Alibaba's dominant market position and scale advantages create a durable moat that supports premium valuation over time. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer cyclical space. Sluggish 2% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer