Last Update02 Oct 25Fair value Increased 9.16%
“Deeply Undervalued Tech Giant” → Reflects Alibaba’s strong fundamentals, scale, and profitability, contrasted with its current price well below intrinsic estimates ($318 fair value, $254 risk-adjusted).
Alibaba’s Outlook Brightens Amid Attractive Valuation Metrics
Alibaba Group’s future is increasingly promising, supported by strong fundamentals and a compelling valuation relative to risk-free benchmarks.
Using a forward earnings-based approach, the company’s fair value is estimated at $318 per share. When adjusted for the current 10-year U.S. Treasury yield, this implies a risk-adjusted intrinsic value of $254—already reflecting a prudent 20% discount to account for macroeconomic and interest rate dynamics.
However, acknowledging investor concerns specific to Chinese equities—including regulatory and geopolitical considerations—we apply an additional, conservative liquidity and country-risk discount of 40% to the base fair value. This yields a target entry price of $203, representing a highly attractive margin of safety for long-term investors.
At this level, Alibaba offers not only significant downside protection but also substantial upside potential as sentiment normalizes, earnings recover, and valuation gaps narrow. In today’s market, few global tech leaders combine such scale, profitability, and discounted valuation—making Alibaba a standout opportunity for discerning investors.
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Disclaimer
The user jaikhom has a position in NYSE:BABA. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
