Alibaba: Cloud Intelligence Could Bring In Big Profits, But Only Later

Summary:

  • With Alibaba’s domestic e-commerce segment, TTG, struggling, as competition intensifies and online retail sales’ growth softens, can the company revive perfomance?
  • The Cloud Intelligence Group certainly shows promise from a profits’ perspective, with a 155% YoY EBITA growth in Q1 FY 25, which could outpace TTG’s absolute EBITA by FY28.
  • However, it remains to be seen whether this profit growth can continue. In the meantime, there continues to be risk from TTG’s lacklustre performance.
  • Despite attractive forward multiples, Alibaba is then a wait and watch stock, leading to a Hold rating.

Alibaba Group company office building and brand logo

Robert Way

When I last wrote about China’s e-commerce giant Alibaba (NYSE:BABA) a couple of months ago, the challenges it faced looked far more daunting than the upside presented by its muted market multiples. This resulted in a rating


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