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Alibaba Group Holding Limited

BABA
37
Specialty Retail · Consumer Cyclical
Price
$114.96
-2.53 (-2.15%)
Market Cap
$275.54B
Exchange
New York Stock Exchange
Winston Score
37
Winston is serious
Below-average fundamentals — multiple weak pillars.

Share count falling — buybacks

11.7% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 2.72B (2022) → 2.40B (2026)

Alibaba is a giant Chinese technology and e-commerce company. It runs online shopping platforms — Taobao and Tmall — where hundreds of millions of consumers in China buy everything from clothes to electronics. It also operates Alibaba.com, a wholesale marketplace connecting businesses around the world with suppliers, mostly in China.

Alibaba makes money through advertising fees and commissions charged to merchants on its platforms, plus fees from its cloud computing division, Alibaba Cloud, which is the largest cloud provider in China. The company operates primarily in China but has international commerce and cloud businesses expanding across Southeast Asia and beyond, with annual revenue exceeding $130 billion. Its main competitive advantage is the sheer scale of its merchant and buyer network, which is difficult for rivals to replicate. The biggest risk the company faces is ongoing regulatory pressure from the Chinese government, which has already forced major structural changes to the business and continues to create uncertainty for investors.

Winston Score History

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+2.9% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+104.5% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$66.5B/ year

Rising (+16% vs prior year)

6.5% of revenue

1.6x the sector average (4%)

R&D investment increasing — building for the future

Insider Activity

7.9%ownership

Insiders own a meaningful stake in the company

Cash Runway

5+ years

Quarterly Free Cash Flow

↓ Burn rate worsening

$1.0T cash & investments at current burn rate

Growth context

Alibaba Group Holding Limited is growing revenue at 3% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Gross Margin
34.5%
Modest — 34.5% gross margin
Operating Margin
-0.3%
Losing money on operations — -0.3%
ROCE
-0.1%
Weak — -0.1% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY
+2.7%
Nearly flat sales (2.7% YoY)
EPS YoY
-45.9%
Earnings shrinking (-45.9% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
107%
Turns 107% of profit into real cash
FCF Margin
-6.0%
Burning cash (-6.0%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

Debt / Equity
0.25
Conservative — low debt load (0.25)
Interest Cover
5.42x
Adequate interest coverage (5.4x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)
3.6x
Attractive valuation — P/E 3.6

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward
+2.3
GROWING
Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield
1.11%
Small dividend — 1.11% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth
N/A
no trend
Data not available

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