To: Madharry who wrote (78121 ) 9/17/2025 11:30:38 AM From: E_K_S Read Replies (1) | Respond to The DCF $/share from Gemini is $231.25/share; From the link I provided $204.26excess cash —the cash on the balance sheet that is not required for day-to-day operations—is typically added back in the final step of the DCF to determine Equity Value.Metric/Detail Description Required Operating Cash This is the minimum cash balance a company needs to run its normal operations (e.g., to cover near-term expenses). This portion of cash is generally embedded in Net Working Capital and is therefore implicitly included in the FCFF projections. Excess Cash This is any cash balance above and beyond the required operating cash. It is considered a non-operating asset because it's available for non-operational uses (like dividends, share buybacks, or acquisitions) without impacting the projected operational cash flows. DCF Treatment The entire balance of Excess Cash is added directly to the Enterprise Value to arrive at the Equity Value . This is because it belongs to the shareholders but wasn't included in the core cash flow projections.
------------------------------------------------------------------------------------The Cash on the Balance Sheet Detail: Required Operating Cash ($5 Billion): This is considered part of Net Working Capital (a key input in FCFF) and is therefore already valued in the Enterprise Value of $500 Billion.Excess Cash ($65 Billion): This is the non-operating portion and is explicitly added back in Step 2, directly increasing the value available to shareholders.Component Metric/Detail Value (Illustrative) Total Equity Value From Step 2. $555 Billion Shares Outstanding Current number of shares (based on recent filings/estimates). 2.4 Billion Intrinsic Price Per Share Equity Value/Shares Outstanding. $231.25
illustrative DCF analysis is that Alibaba's intrinsic value is approximately $231.25 per share .If the market price of BABA stock were, for instance, $90.00, the DCF would suggest the stock is significantly Undervalued . Crucially, $65 Billion of the Equity Value is directly attributable to the cash the company holds in excess of its operating needs. This non-operating cash is highly certain and directly increases the shareholders' total value. Based on the illustrative DCF analysis for Alibaba (BABA) where the excess cash was estimated at $65 Billion and the total Shares Outstanding were 2.4 Billion , the value per share directly attributable to that excess cash is:
