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Alibaba (BABA) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Alibaba (BABA - Free Report) closed at $83.69, marking a -0.94% move from the previous day. This change lagged the S&P 500's 0.16% gain on the day. Elsewhere, the Dow gained 0.25%, while the tech-heavy Nasdaq lost 0.06%.

The the stock of online retailer has fallen by 5.96% in the past month, lagging the Retail-Wholesale sector's loss of 4.84% and the S&P 500's loss of 2.8%.

Analysts and investors alike will be keeping a close eye on the performance of Alibaba in its upcoming earnings disclosure. The company's upcoming EPS is projected at $3.03, signifying a 13.48% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $38.54 billion, indicating a 5.09% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $9.30 per share and a revenue of $138.26 billion, demonstrating changes of +7.89% and +5.95%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Alibaba. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Currently, Alibaba is carrying a Zacks Rank of #3 (Hold).

Investors should also note Alibaba's current valuation metrics, including its Forward P/E ratio of 9.08. This expresses a discount compared to the average Forward P/E of 21.6 of its industry.

Investors should also note that BABA has a PEG ratio of 0.38 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Commerce industry held an average PEG ratio of 1.2.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 69, finds itself in the top 28% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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