Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 16 Jul, 25 | BABA | Buy | USD 115.0 | USD 120.0 | USD 128.0 | 7 days | Closed |
7.71%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.
Increase in Gross Margin
(40.0% in FY25 vs 37.7% in FY24)
Increase in Net Margin
(12.0% in FY25 vs 8.4% in FY24)
Lower Current Ratio
(1.55x in FY25 vs 1,79x in FY24)
Decrease in EBITDA Margin
(19.3% in FY25 vs 24.9% in FY24)
Regulatory Overhang in China and Abroad, Cloud Business Faces Global and Domestic Headwinds, Increasing Competition in E-Commerce, Execution Risk in AI and Cloud Transformation, etc.
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 115.0 | 99.0 | 120.0 | 128.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
1. Financial Recovery With Margin Expansion- Alibaba delivered a solid financial performance in Q4 FY2025, with a 93% YoY surge in operating profit and 36% growth in adjusted EBITA, reflecting strong margin recovery driven by operating efficiency and disciplined spending. Full-year operating profit rose 24% despite moderate top-line growth of 6%, indicating structural improvements in profitability. The management's focus on cost discipline, coupled with investments in high-margin areas like AI and cloud, supports a positive earnings trajectory ahead.
2. Cloud & AI Become Long-Term Growth Catalysts- The Cloud Intelligence Group reported 18% revenue growth in Q4, led by strong AI-related demand. Notably, AI-related product revenues have now seen seven consecutive quarters of triple-digit growth. With the launch of the Qwen3 series and growing enterprise adoption of AI assistants like Tongyi Lingma, Alibaba is increasingly well-positioned in the generative AI space. Recognition by Gartner as a leader across all key AI submarkets bolsters its strategic credibility and global standing.
3. Core E-Commerce Shows Resilience and Innovation- Taotian Group, Alibaba’s domestic e-commerce arm, saw 12% YoY growth in customer management revenue, signaling a rebound in merchant monetization and platform efficiency. Initiatives like full-site promotion, improved customer service, and expanding 88VIP membership (now over 50 million) point toward healthy user engagement and merchant stickiness. These developments underscore Alibaba's renewed focus on user-centric commerce and commercial innovation amid a competitive retail landscape.
4. International Business Scaling Efficiently- Alibaba International Digital Commerce (AIDC) grew 22% YoY, led by cross-border platforms like AliExpress and Trendyol. Focused expansion into high-potential markets such as Europe and the Gulf, combined with improved unit economics in AliExpress Choice, indicate better operational efficiency. As global e-commerce matures, Alibaba’s region-specific strategies and hybrid models may provide differentiated growth levers against global peers.
5. Outlook on Cash Flows Due to Cloud Investment- Despite robust profitability, free cash flow fell 76% YoY in Q4 and 53% for the full year, largely due to elevated investments in cloud infrastructure. While these investments are strategically aligned with long-term AI and cloud growth, they compress near-term liquidity metrics. Investors should monitor future capex trends to assess the balance between growth spending and cash return capabilities.
Considering potential for operational efficiency, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Alibaba Group Holding Ltd (NYSE: BABA) at the current market price of USD 115.00, as on July 16, 2025 at 8:05 am pdt.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Internet Retail
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| BABA Alibaba Group Holding Ltd |
-0.72 0.60% | 118.64 | 10.59 | 7.29 | 0.21 | 1.28 | 0.14 | 0.91 |
| AMZN Amazon.com Inc |
-0.56 0.24% | 230.45 | 50.46 | 44.05 | 3.37 | 9.59 | 3.45 | 22.21 |
| BABAF Alibaba Group Holding Ltd |
0.98 6.56% | 15.98 | 19.26 | 8.76 | 1.58 | 1.54 | 1.36 | 8.84 |
| PDD PDD Holdings Inc. |
-1.135 0.98% | 114.28 | 20.54 | 13.26 | 0.62 | 5.93 | 0.50 | 1.74 |
| MELI MercadoLibre Inc. |
4.10 0.17% | 2389.00 | 76.32 | 45.05 | 5.06 | 23.84 | 5.17 | 30.47 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jul 16,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Copyright © 2023 Krish Capital Pty Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.
