Alibaba Group Holding Limited (BABA): investment thesis checklist
What a value investor writing down why they own Alibaba Group Holding Limited would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 10.1% in FY2025; between 9.7% and 16.1% over 6 filed years, median 10.5%. Does the thesis need it to stay inside that range?
- Return on equity: 9.8% in FY2026; between 6.5% and 19.8% over 10 filed years, median 14.2%. Does the thesis need it to stay inside that range?
- Gross margin: 39.8% in FY2026; between 36.7% and 62.4% over 10 filed years, median 40.6%. Does the thesis need it to stay inside that range?
- Operating margin: 4.9% in FY2026; between 4.9% and 30.4% over 10 filed years, median 13.3%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 0.40x in FY2025; between -1.75x and 0.40x over 6 filed years, median -0.88x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 7.4% in FY2026; between 7.4% and 51.2% over 10 filed years, median 43.2%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Alibaba Group Holding Limited's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Revenue Growth 1Y stays at or above 0%
Today 2.74%. Replayed over 9 filed years, it held in every one.
Current Ratio stays at or above 1.02x
Today 1.28x. Replayed over 2 filed years, it held in every one.
Gross Margin stays at or above 31.8%
Today 39.81%. Replayed over 10 filed years, it held in every one.
3. What would break it
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which current ratio fell below 1.02x.
- A filed year in which gross margin fell below 31.8%.
4. The published tests it meets today
Of 30 tests value investors published: 0 met, 23 not met, 7 we could not complete. Counts, never a score.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.