Is BABA a high-quality business?

AlphaMadera's AlphaQuality grade scores Alibaba Group Holding Limited on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how BABA compares to a Buffett-style quality bar.

What is Alibaba Group Holding Limited's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to BABA based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes BABA a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

BABA - Alibaba Group Holding Limited

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $193.20 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

C 55.1 / 100 composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 20%

D 38.1

5yr Avg ROIC 5.4% 37/100
Operating Margin Trend -0.24 pp/yr 40/100

Capital Efficiency

Weight: 15%

C+ 61.9

5yr Avg ROE 6.8% 44/100
5yr Share-Count CAGR -3.1% 95/100

Growth Quality

Weight: 15%

C- 48.3

5yr Revenue CAGR -35.9% 0/100
5yr EPS CAGR 18.0% 92/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

C- 46.1

5yr FCF Margin 3.6% 43/100
5yr FCF/NI Conversion 0.54x 50/100

Balance Sheet

Weight: 20%

A- 82.9

Net Debt / EBITDA -7.00x 100/100
Interest Coverage (EBIT/Int) 5.90x 69/100
Altman Z-Score 2.78 69/100

Stability

Weight: 15%

C- 50.0

EPS Volatility (σ/μ) 0.39 45/100
Piotroski F-Score 3 33/100
Negative-Revenue Years (5) 1/5 80/100

5 of 7 gurus held; 3 trimmed; 2 full exits.

Holders: 5 -2
Avg Δ position: -26.9%
New buys: 0
Full exits: 2

Loeb sold -100%
Laffont sold -100%
Cooperman decreased -52%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.