Alibaba Group operates as an online and mobile commerce company in China, providing internet infrastructure, e-commerce, online financial, and internet content services. The company was founded in 1999 and is based in Hangzhou, China.
BABA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for BABA, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Alibaba Group Holding Ltd ranked in the 51th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of Alibaba Group Holding Ltd, consider:
The company has produced more trailing twelve month cash flow than 98.84% of its sector Technology.
The business' balance sheet reveals debt to be 0% of the company's capital (with equity being the remaining amount). Approximately just 3.32% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
BABA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 59.73% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CTSH, IMXI, PRGS, RMBS, and CSOD can be thought of as valuation peers to BABA, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
Online retail is primed for decades of growth as consumers and enterprises do more of their shopping online, and top players in the space will likely deliver stellar performance for shareholders. Read on to see why they think Baozun (NASDAQ: BZUN), eBay (NASDAQ: EBAY), and Alibaba (NYSE: BABA) have what it takes to deliver market-crushing returns. Keith Noonan (Baozun): China's large and rapidly expanding online retail industry presents attractive opportunities for growth, and many companies around the world are looking to the market as a key part of their long-term strategies.