Alibaba Screens 37.2% Undervalued at $199 a Share as AI Push Meets Lawsuits

1 articles · Updated · Yahoo Finance · Aug 13

$199 per share is Alibaba's DCF-based intrinsic value estimate, implying the stock trades about 37.2% below fair value despite a 49.2% three-year gain.
The valuation case rests on expectations that cash flow recovers from a latest 12-month free-cash-flow loss of CN¥9.1 billion, helped by monetization of Qwen AI models and cloud infrastructure.
Legal risk is the main drag on that discount: recent class-action lawsuits cite alleged undisclosed military ties and AI-related conduct, raising investor concerns over regulation and required returns.
Across Simply Wall St's broader checks, Alibaba screened undervalued on 6 of 6 metrics, leaving investors to weigh whether the discount fully compensates for those uncertainties.