BABA PE Ratio & Valuation,Is BABA Overvalued

BABA Relative Valuation

BABA's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, BABA is overvalued; if below, it's undervalued.

Historical Valuation

Alibaba Group Holding Ltd (BABA) is now in the Fair zone, suggesting that its current forward PE ratio of 20.30 is considered Fairly compared with the five-year average of 13.18. The fair price of Alibaba Group Holding Ltd (BABA) is between 92.23 to 163.01 according to relative valuation methord.

Relative Value

Fair Zone

92.23-163.01

Current Price：146.75

Fair

20.30

14.14

EV/EBITDA

Alibaba Group Holding Ltd. (BABA) has a current EV/EBITDA of 14.14. The 5-year average EV/EBITDA is 10.16. The thresholds are as follows: Strongly Undervalued below 0.07, Undervalued between 0.07 and 5.11, Fairly Valued between 15.20 and 5.11, Overvalued between 15.20 and 20.25, and Strongly Overvalued above 20.25. The current Forward EV/EBITDA of 14.14 falls within the Historic Trend Line -Fairly Valued range.

20.30

EV/EBIT

Alibaba Group Holding Ltd. (BABA) has a current EV/EBIT of 20.30. The 5-year average EV/EBIT is 17.28. The thresholds are as follows: Strongly Undervalued below -7.49, Undervalued between -7.49 and 4.90, Fairly Valued between 29.66 and 4.90, Overvalued between 29.66 and 42.05, and Strongly Overvalued above 42.05. The current Forward EV/EBIT of 20.30 falls within the Historic Trend Line -Fairly Valued range.

2.25

Alibaba Group Holding Ltd. (BABA) has a current PS of 2.25. The 5-year average PS is 2.17. The thresholds are as follows: Strongly Undervalued below 0.18, Undervalued between 0.18 and 1.18, Fairly Valued between 3.16 and 1.18, Overvalued between 3.16 and 4.16, and Strongly Overvalued above 4.16. The current Forward PS of 2.25 falls within the Historic Trend Line -Fairly Valued range.

11.92

P/OCF

Alibaba Group Holding Ltd. (BABA) has a current P/OCF of 11.92. The 5-year average P/OCF is 10.89. The thresholds are as follows: Strongly Undervalued below 2.91, Undervalued between 2.91 and 6.90, Fairly Valued between 14.87 and 6.90, Overvalued between 14.87 and 18.86, and Strongly Overvalued above 18.86. The current Forward P/OCF of 11.92 falls within the Historic Trend Line -Fairly Valued range.

37.40

P/FCF

Alibaba Group Holding Ltd. (BABA) has a current P/FCF of 37.40. The 5-year average P/FCF is 16.04. The thresholds are as follows: Strongly Undervalued below -1.03, Undervalued between -1.03 and 7.51, Fairly Valued between 24.58 and 7.51, Overvalued between 24.58 and 33.11, and Strongly Overvalued above 33.11. The current Forward P/FCF of 37.40 falls within the Strongly Overvalued range.

Alibaba Group Holding Ltd (BABA) has a current Price-to-Book (P/B) ratio of 2.45. Compared to its 3-year average P/B ratio of 1.57 , the current P/B ratio is approximately 56.24% higher. Relative to its 5-year average P/B ratio of 2.02, the current P/B ratio is about 20.87% higher. Alibaba Group Holding Ltd (BABA) has a Forward Free Cash Flow (FCF) yield of approximately 0.11%. Compared to its 3-year average FCF yield of 7.68%, the current FCF yield is approximately -98.59% lower. Relative to its 5-year average FCF yield of 6.86% , the current FCF yield is about -98.42% lower.

2.45

P/B

Median3y

1.57

Median5y

2.02

0.11

FCF Yield

Median3y

7.68

Median5y

6.86

Competitors Valuation Multiple

The average P/S ratio for BABA's competitors is 2.09, providing a benchmark for relative valuation. Alibaba Group Holding Ltd Corp (BABA) exhibits a P/S ratio of 2.25, which is 7.23% above the industry average. Given its robust revenue growth of 4.85%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of BABA increased by 48.47% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 10.49 to 20.82.

The secondary factor is the Revenue Growth, contributed 4.85%to the performance.

Overall, the performance of BABA in the past 1 year is driven by P/E Change. Which is more unsustainable.

4.85%

33.02B → 34.62B

Revenue Growth

-54.81%

18.41 → 8.32

Margin Expansion

98.43%

10.49 → 20.82

P/E Change

48.47%

98.84 → 146.75

Mkt Cap Growth

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Frequently Asked Questions

Is Alibaba Group Holding Ltd (BABA) currently overvalued or undervalued?

What is Alibaba Group Holding Ltd (BABA) fair value?

BABA's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Alibaba Group Holding Ltd (BABA) is between 92.23 to 163.01 according to relative valuation methord.

How does BABA's valuation metrics compare to the industry average?

What is the current P/B ratio for Alibaba Group Holding Ltd (BABA) as of Jan 08 2026?

As of Jan 08 2026, Alibaba Group Holding Ltd (BABA) has a P/B ratio of 2.45. This indicates that the market values BABA at 2.45 times its book value.

What is the current FCF Yield for Alibaba Group Holding Ltd (BABA) as of Jan 08 2026?

As of Jan 08 2026, Alibaba Group Holding Ltd (BABA) has a FCF Yield of 0.11%. This means that for every dollar of Alibaba Group Holding Ltd’s market capitalization, the company generates 0.11 cents in free cash flow.

What is the current Forward P/E ratio for Alibaba Group Holding Ltd (BABA) as of Jan 08 2026?

As of Jan 08 2026, Alibaba Group Holding Ltd (BABA) has a Forward P/E ratio of 20.30. This means the market is willing to pay $20.30 for every dollar of Alibaba Group Holding Ltd’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Alibaba Group Holding Ltd (BABA) as of Jan 08 2026?

As of Jan 08 2026, Alibaba Group Holding Ltd (BABA) has a Forward P/S ratio of 2.25. This means the market is valuing BABA at $2.25 for every dollar of expected revenue over the next 12 months.

BABA Valuation