Alibaba Group Holding Limited (BABA) DCF Valuation
Transparent DCF models put Alibaba Group Holding Limited (BABA)'s fair value in a range of $79.61 – $139.63 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $116.16 sits within that range — roughly fairly valued on these assumptions.
Reverse DCF: at today's $116.16, the market is pricing in roughly +9.9%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -62.4%. The price is betting on acceleration above its track record.
Current Price
$116.16
Fair-Value Range
$79.61 – $139.63
Market-Implied Growth
+9.9%/yr
vs -62.4% 5Y actual
BABA DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $12.1B · 2.33B shares · net debt $12.5B
Estimated Fair Value
$79.61
-31.5% vs $116.16
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $116.16; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $100 | $106 | $112 | $120 | $129 |
| 9.0% | $85.34 | $89.04 | $93.32 | $98.30 | $104 |
| 10.0% | $74.00 | $76.63 | $79.61 | $83.02 | $86.96 |
| 11.0% | $65.08 | $67.01 | $69.17 | $71.59 | $74.34 |
| 12.0% | $57.89 | $59.34 | $60.94 | $62.72 | $64.71 |
About Alibaba Group Holding Limited
Alibaba Group Holding Limited, through its various subsidiaries, furnishes crucial technological infrastructure and extensive marketing channels. This comprehensive support allows merchants, brands, retailers, and other businesses to effectively engage with their customer base, both within the People's Republic of China and across international markets. The company's operations are organized across seven primary segments: China Commerce, International Commerce, Local Consumer Services, Cainiao (its logistics network), Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. The company's extensive digital ecosystem features premier online retail platforms like Taobao and Tmall. Wholesale business-to-business transactions are facilitated through 1688.com and Alibaba.com. Globally, it operates retail platforms such as AliExpress, Lazada, Trendyol, and Daraz. For fresh goods and groceries, it offers Freshippo, and Tmall Global specializes in import e-commerce. Monetization and advertising solutions are provided via Alimama, its proprietary platform, which offers diverse marketing services including pay-for-performance, in-feed, and display ads, supported by the Taobao Ad Network and Exchange for real-time bidding. Logistics operations are primarily handled by the Cainiao Network. Its local consumer services encompass Ele.me for on-demand food and delivery, Koubei for restaurant and local service directories, and Fliggy for travel booking. Alibaba Cloud offers a wide array of services, including elastic computing, data storage, networking, security, database management, big data analytics, and Internet of Things (IoT) solutions. It also supplies hardware, software licenses, installation, and application development and maintenance. The digital media and entertainment division includes Youku, an online video platform; Quark, an information search and content consumption tool; and Alibaba Pictures, collectively offering diverse content spanning films, live events, news feeds, literature, and music. Its innovation portfolio further extends to Amap, a mobile application for digital mapping and navigation; DingTalk, a business communication and efficiency platform; the Tmall Genie smart speaker; and Qwen, an advanced artificial intelligence chatbot. Founded in 1999, Alibaba Group is headquartered in Hangzhou, People's Republic of China.
- Sector
- Consumer Cyclical
- Industry
- Specialty Retail
- CEO
- Yongming Wu