BABA
Alibaba
China
★ Quality 18/100Price today
$116.60
what the market pays
Worth
$148.00
calculated cycle value
Price is 21% below its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
How many times the cash flow
China · vs 6 peers
You pay 14.5x times this business's cash flow; its sector median is 9.5x.
30% below what Charlie thinks it's worth (18.9x) — that gap is your safety margin.
Why Undervalued?
The model estimates an intrinsic value of $148.00 per share. Today's price of $116.60 is 27% below that value — there's a real safety margin to enter.
The price is 21% below the calculated value. There's a real safety margin.
The model asks for a discount to absorb estimate errors. That cushion is here.
If the business disappoints a little, the price should hold near $118.40.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$118.40
-20% off Value
🟡 Discounted
≤$140.60
-5% off Value
🟢 Today
$116.60
+27% Valor
Undervalued
Today's price offers a real discount to the calculated value. For the long run, this is the kind of entry that builds wealth.
“Price is what you pay. Value is what you get.”
— Warren Buffett
Model updated · July 2026
The business
China's shopping mall that now also sells picks and shovels for AI.
Alibaba runs China's largest digital commerce ecosystem (Taobao, Tmall) and the country's leading cloud. It charges merchant commissions, advertising, and cloud services on a usage basis. Cloud grew double digits, driven by AI demand for its Qwen model.
Network effect in commerce with hundreds of millions of repeat buyers and integrated Cainiao logistics. In cloud, domestic scale and in-house chips give it a cost edge over local rivals. The moat is real but erodible: PDD and Douyin are eating its e-commerce share.
Revenue history
From $134.6B to $143.5B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $148.4B · FY2026
Of every $100 in sales, $90 goes to costs and operations; $10 is left as net profit (10% margin).
Catalysts and risks
Alibaba Cloud accelerating to >18% YoY with operating margin rising on AI mix.
Buybacks: $35B program running through March 2027, cutting shares ~5% annually.
Spin-offs and monetization of non-core assets (Sun Art, Intime already sold) freeing up capital.
VIE structure: shareholders don't own the Chinese operations, only contractual rights.
Trump tariffs and U.S.-China tension could force delisting or secondary sanctions.
Aggressive competition from PDD and Douyin pressures take-rate and domestic commerce margins.
Charlie's note
“Paying 17x for China's biggest commerce moat and a cloud growing double digits with AI isn't demanding; the risk isn't the price but PDD and Douyin continuing to gnaw at share, so you're paid for patience while the 8% growth and 38% margin prove the moat holds.”
Analysis · May 2026
So when would be a good price for Alibaba?
Today it trades below what we calculate. If you want us to tell you when that changes —or when the value itself moves because the company reported— we will email you.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.