X
<

US Internet Industry: What Alphabet, Facebook, Amazon Are Up To

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 11
US Internet Industry: What Alphabet, Facebook, Amazon Are Up To PART 11 OF 15

Alibaba’s Fundamental Analysis

Deciphering Facebook’s comprehensive valuation

Alibaba (BABA) has an EV (enterprise value) of ~$443.7 billion. Peer companies Square (SQ), Yelp (YELP), Alphabet (GOOG), and Groupon (GRPN) have EVs of ~$10.0 billion, ~$3.1 billion, ~$557.9 billion, and ~$2.1 billion, respectively.

Facebook’s EV-to-adjusted-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio for the trailing 12 months is 42.4x. The estimate for 2017 is 25.9x.

 

Alibaba’s Fundamental Analysis

Interested in BABA? Don't miss the next report.

Receive e-mail alerts for new research on BABA

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Alibaba’s EBITDA numbers

Alibaba’s EBITDA fell 33.0% to $10.1 billion last year. Analysts are expecting the company to post EBITDA of $17.1 billion this year, implying a potential fall of 25.0%.

Alibaba’s shares are changing hands at a price-to-EBITDA ratio of 44.3x. In comparison, Square, Yelp, Alphabet, and Groupon shares are changing hands at price-to-EBITDA ratios of 478.3x, 64.9x, 20.1x, and 24.7x, respectively.

A look at Alibaba’s debt position

Alibaba’s balance sheet reflects a total debt of $13.8 billion, with $2.4 billion in short-term debt and $11.3 billion in long-term debt. The company reported total capital of ~$64.6 billion. So its total debt-to-total-capital ratio is 21.3%.

The company’s debt-to-assets, debt-to-equity, and debt-to-EBITDA ratios are 0.09x, 33.1x, and 0.60x, respectively. Delving deeper into the company’s debt ratios, we see that Alibaba has an EBIT (earnings before interest and tax)-to-interest ratio of 25.9x. That provides a clue to the company’s ability to pay interest on its outstanding debt. It’s what analysts call interest coverage ratio. The company has a debt-to-EV value of 3.0%.

Market capitalization

As of September 11, 2017, Alibaba was the second-largest Internet player in terms of market capitalization globally at ~$445.8 billion. In comparison, Square’s market capitalization is ~$10.6 billion, Yelp’s is ~$3.6 billion, Alphabet’s is ~$648.9 billion, and Groupon’s is ~$2.6 billion.

Stock trends

Alibaba generated investor returns of 14.7% in the trailing one-month period and 74.7% in the trailing 12-month period. The company’s share price rose 1.8% in the trailing five-day period.

Alibaba’s credit rating

Moody’s rating on Alibaba’s debt is A1. The company also has an S&P debt rating and a debt outlook of A+ and stable, respectively.

Inside Alibaba’s cash flow metrics

Alibaba has $22.5 billion of cash on hand. The stock is trading at a price-to-cash-flow ratio and a price-to-free-cash-flow ratio of 32.1x and 33.6x, respectively. Its trailing 12-month EV-to-cash-flow ratio is 31.9x, and its trailing 12-month EV-to-free-cash-flow-to-firm ratio is 33.2x.

X

Please select a profession that best describes you: