BABAAlibaba Group Holding Limited
Is the business good?
The checks split: earnings fully cash-backed (2.0×), but margins compressing.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Operating profit is falling even as sales grow, costs are outrunning the top line.
A balanced mix of margins, efficiency, and leverage. ROE 10% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is BABA?
Alibaba Group Holding Limited earns 5.1% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 3.9 points below what the capital costs: growth destroys value
- Operating margin
- 4.9%
Operating margin · Internet Retail median 6.0% · fiscal year to FY2026
- Cash conversion
- 1.98×
Cash conversion · 1.50× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −0.43%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2021 | 13% |
| FY2022 | 8.2% |
| FY2023 | 12% |
| FY2024 | 12% |
| FY2025 | 14% |
| FY2026 | 4.9% |
Details›
- Gross marginfiscal year to FY2026
- 40%
- Operating marginfiscal year to FY2026
- 4.9%
- Net marginfiscal year to FY2026
- 10%
- R&D as % of revenue
- 6.5%
- Revenue, trailing twelve months
- $1.02T
- Net income, trailing twelve months
- $103.6B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 5.1%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Internet Retail
Ranks #3 of 14 by RyuScore