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Priced below base case
What is Alibaba Group Holding Limited (BABA) worth?
Currently $117.97 — below the base case ($145.00) · ● live
Platform / optionality
medium confidence in the point estimate
● live · as of 2026-07-21 21:13 · Market cap $282.1B
As of 2026-07-15, Alibaba Group Holding Limited (BABA) looks undervalued. Dolphy estimates a fair value of $140.00 versus a current price of $117.97 — a 16% discount to fair value.
Executive summary
Alibaba (BABA) trades at ~$117.69/ADS (data as of 15-Jul-2026), ~13x forward EPS ($9.09), ~1.7x book, with a ~6.4% dividend yield and a fortress balance sheet. FY26 (year ended March 2026) was a deliberate investment year: group operating income fell to RMB 59.7B from RMB 147B and free cash flow turned negative (RMB -50.7B) as the company poured capital into AI infrastructure (capex RMB 127B) and into the 'quick commerce' war under the rebranded Taobao Instant Commerce. That optically ugly P&L masks a business whose crown-jewel China commerce franchise remains highly profitable and whose Cloud Intelligence arm is reaccelerating hard — external cloud revenue grew +40% in Q4 FY26 with AI products ~30% of that revenue.
I value Alibaba via a probability-weighted SOTP (~$146), cross-checked against forward-P/E comps (~$145) and a normalized DCF (~$95, the low anchor given depressed FCF). Probability-weighting bear/base/bull scenarios yields a fair value of ~$140/ADS, a ~16% discount to the current price. The Street is more bullish still (mean target $190, 38 of 40 buy-rated). Verdict: modestly undervalued, with the main debate being how quickly instant-commerce losses fade and how much credit cloud/AI deserves.
How we value it
Probability-weighted SOTP, cross-checked with forward P/E comps and a normalized DCF
Every figure is computed from SEC filings by the analyst’s calculator tools and fact-checked by a second, independent model.
Investment thesis
About Alibaba Group Holding Limited
Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses in the People's Republic of China and internationally. It operates through the Alibaba China E-Commerce Group, Alibaba International Digital Commerce Group, Cloud Intelligence Group, and All Others segments. The Alibaba China E-commerce Group segment operates Taobao and Tmall, which are digital retail platforms; Taobao Instant Commerce, a local services and on-demand delivery platform; 1688.com, a domestic wholesale marketplace; and Xianyu, a consumer-to-consumer community and marketplace for idle goods. Its Alibaba International Digital Commerce Group segment includes AliExpress, a global e-commerce platform; Trendyol, an e-commerce platform in Turkey; Lazada, an e-commerce platform in Southeast Asia; Daraz, an e-commerce platform in South Asia, primarily in Pakistan and Bangladesh; and Alibaba.com, an integrated international online wholesale marketplace. The Cloud Intelligence Group segment offers a suite of cloud services based on infrastructure-as-a-service, platform-as-a-service, and model-as-a-service. Its All Others segment comprises Amap, a provider of mobile digital maps, navigation, and real-time traffic information in China; Cainiao, which provides logistics solutions; Youku, an online long-form video platform in China; Freshippo, a retail platform for groceries and fresh goods; and Alibaba Health, a pharmaceutical and healthcare services platform. Alibaba Group Holding Limited was incorporated in 1999 and is based in Hangzhou, China.
Frequently asked questions
Is BABA a buy?
As of 2026-07-15, Alibaba Group Holding Limited (BABA) looks undervalued. Dolphy estimates a fair value of $140.00 versus a current price of $117.97 — a 16% discount to fair value.
What is BABA's fair value?
Dolphy's estimated fair value for Alibaba Group Holding Limited (BABA) is $140.00, versus a current market price of $117.97.
Is BABA overvalued or undervalued?
Alibaba Group Holding Limited (BABA) currently looks undervalued — trading at a 16% discount to Dolphy's estimated fair value of $140.00.
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AI-generated research by Dolphy for educational and informational purposes only — not investment advice. Figures are computed from public sources and may contain errors.