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:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Alibaba Group Holding Ltd. To summarize, we found that Alibaba Group Holding Ltd ranked in the 68th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. In terms of the factors that were most noteworthy in this DCF analysis for BABA, they are:
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 only 3.92% 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 62.5% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as BABA, try MODN, MLNX, KN, ECOM, and EXTR.