Yiannis Zourmpanos
3 min read
In This Article:
China’s Alibaba Group (BABA) is making waves with an ambitious plan to restructure its core consumer-facing business, consolidating food delivery platform Ele.me and travel portal Fliggy into an all-new e-commerce unit. CEO Eddie Wu termed the restructuring a “strategic upgrade” while Alibaba is shifting from an old-school marketplace to an end-to-end integrated consumer platform powered by machine intelligence. The stock is already up more than 33% in the year to date, gaining momentum on rumors of such restructuring.
The restructuring comes amid signs of fresh momentum for China’s e-commerce sector and speculation about potential spinoffs, including the possible return of an Ant Financial IPO. Even though shares are still much lower than their all-time highs, investors are taking notice again in 2025.
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China-based Alibaba is a multinational cloud computing and e-commerce firm. It operates across consumer retail (Taobao, Tmall), cross-border retail (AliExpress, Lazada), cloud computing (Alibaba Cloud), logistics (Cainiao), and digital media and entertainment. Its market capitalization is roughly $271 billion and Alibaba remains one of Asia’s most influential technological powerhouses.
BABA shares have gained 33% in 2025, handily surpassing the S&P 500 Index’s ($SPX) 4.5% gain. The stock had bottomed at $71.80 at its 52-week low but was recently trading above $113, up nearly 60% from its lows.
Investors are responding positively to stabilization trends at Alibaba’s core China businesses and its new focus on shareholder returns.
Despite the YTD rally, BABA’s valuation is still attractive relative to peers. BABA trades at 11.8x forward earnings and 2x price-to-sales, both lower than its historical averages and its sector benchmarks.
Alibaba recently reported strong Q4 FY2025 results. Its revenue rose 7% year-on-year to $32.58 billion, and its adjusted EBITA rose 36% to $4.5 billion. What was most notable was that its net income rose 1,203% to $1.65 billion. Its adjusted EPS were $1.73, up 23% from the prior year, easily beating Wall Street estimates.
Cloud growth remains robust, and AI-related product revenue saw triple-digit gains for seven straight quarters. For fiscal 2026, analysts have a consensus EPS estimate of $9.72, forecasting nearly 18% growth year over year.
