BABA
Alibaba Group Holding Limited
$110.64
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 5.3% above fair value
You pay
$110.64
Bear
$91.89
Fair
$105.02
Bull
$118.14
Bear
$91.89
-16.9%
$6.56 × 14x P/E
Fair
$105.02
-5.1%
$6.56 × 16x P/E
Bull
$118.14
+6.8%
$6.56 × 18x P/E
Adjust Assumptions
16.0x
6.56$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
16.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (59 analysts)
$180.57
Divergence from AlphaVal
42%
Summary
Applying a 16x P/E to adjusted EPS of $6.56, the base-case value is $105.02 per share.
Warnings
The company pays out 87% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $180.57 (from 59 analysts). Our estimate is 42% below the consensus -- consider that gap carefully.
Financial statements were converted from CNY into USD using USDCNY at 0.1492 USD per CNY.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples