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Alibaba's Post-Earnings Update: Cloud, Mobile Users, Brand Rights

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Part 15
Alibaba's Post-Earnings Update: Cloud, Mobile Users, Brand Rights PART 15 OF 16

Alibaba’s Fundamental Analysis after Fiscal 1Q18

Deciphering Alibaba’s comprehensive valuation

Alibaba’s (BABA) enterprise value (or EV) is ~$428.9 billion. Its peers Twitter (TWTR), Facebook (FB), Amazon (AMZN), and Alphabet (GOOG) have enterprise values of ~$10.1 billion, ~$450.2 billion, ~$440.7 billion, and ~$547.3 billion, respectively.

Alibaba’s Fundamental Analysis after Fiscal 1Q18

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Alibaba’s EV-to-adjusted-EBITDA1 for the trailing 12 months is 41.5x. Its EV-to-estimated-EBITDA for 2017 is 26.0x.

Alibaba’s EV-to-sales multiple for the trailing 12 months is 16.1x, while its EV-to-sales multiple is expected to be 9.1x in 2017.

Alibaba’s trailing-12-month EV-to-cash-flow multiple is 31.3x, and its trailing-12-month EV-to-free-cash-flow multiple is 32.1x.

Where do Alibaba’s EBITDA and ratios stand?

Alibaba’s EBITDA2 margin for 2017 was 38x, which was down 32% from 2016.

Alibaba’s EV-to-adjusted-EBITDA for this year is expected to be 26.0x. Next year’s EV-to-adjusted-EBITDA is forecast to be 19.4x. Alibaba stock has a price-to-EBITDA multiple of 42.8x.

Inside Alibaba’s price and valuation multiples

Alibaba’s current book value per share of ~$17.40 compares with its expected book value per share of ~$21.70. Alibaba stock has a price-to-book value of ~9.4x.

Its peers Twitter (TWTR), Facebook (FB), Amazon (AMZN), and Alphabet (GOOGL) have current book value per share readings of ~$6.50, $22.90, ~$48.50, and ~$214.30, respectively.

The company’s price-to-sales multiple of ~16.5x is higher than its estimated price-to-sales-book value of ~12.1x.

How much debt is Alibaba carrying?

Alibaba’s (BABA) total debt load is $13.8 billion, calculated by adding its short-term debt of $2.4 billion and long-term debt of $11.3 billion. With the company’s total capital of $64.7 billion, its total debt-to-total-capital ratio is 21.3%.

With respect to Alibaba’s assets, equity, and EBITDA, its debt-to-asset ratio is 0.17, its debt-to-equity ratio is 31.3, and its debt-to-EBITDA ratio is ~1.4.

  1. enterprise value to adjusted earnings before interest, tax, depreciation, and amortization
  2. earnings before interest, tax, depreciation, and amortization
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