BABANEUTRAL

BABA Return on Equity (ROE) Analysis

9.2%

Higher than 56% of Consumer Cyclical sector peers

Updated 226h ago·SEC filings & market data

Key Takeaway

Return on equity (ROE) measures how much profit a company generates from each dollar of shareholders’ equity — a 9.2% ROE means BABA earns $0.092 for every $1 of invested equity.

Sector Performance

56th percentile

BABA

9.2%

Sector Median

8.1%

Sector Avg

-34.0%

Prior Period

9.8%(May 2026)

↓ Declining

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Deep Analysis

Return on equity (ROE) measures how much profit a company generates from each dollar of shareholders’ equity — a 9.2% ROE means BABA earns $0.092 for every $1 of invested equity.

That figure sits above the Consumer Cyclical sector median of 8.6%, placing BABA at the 53rd percentile among its peers, or just above the middle of the pack. While the year-over-year change is not available, the quarter-over-quarter change is -6.1%, dropping from 9.8% to 9.2%; despite that immediate decline, the 8-quarter trend direction is increasing, with historical values climbing from 1.4% to 9.2% over the period. The combination of a level near the sector median with an upward longer-term trend suggests modest profitability that is improving, though the recent quarterly pullback adds mild near-term caution. This mixture translates into balanced risk: the improving trend lowers downside concern, but the sub-10% return offers limited upside conviction. On balance, the metric supports the overall NEUTRAL verdict — it neither strengthens the bull case nor deepens the bear case.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about BABA?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

How does BABA's Return on Equity (ROE) compare to its sector?

BABA's Return on Equity (ROE) of 9.2% compares to a Consumer Cyclical sector median of 8.1%, placing it in the 56th percentile.

Who are BABA's closest peers by Return on Equity (ROE)?

The closest Consumer Cyclical peers by Return on Equity (ROE) include: BWA (8.1%), JACK (8.6%), W (11.3%), TSLA (4.7%), AMCR (4.4%).

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Learn More About Return on Equity (ROE)

What Is Return on Equity (ROE) and Is Higher Always Better?

Return on equity ROE measures how efficiently a company generates profit from shareholder capital. Learn how to decompose ROE using DuPont analysis and why high leverage can make it dangerous—with Apple and JPMorgan examples.

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.