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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 $226.90, marking a -0.31% move from the previous day. This change lagged the S&P 500's 1.49% gain on the day. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 2.56%.

Heading into today, shares of the online retailer had lost 13.72% over the past month, lagging the Retail-Wholesale sector's loss of 2.15% and the S&P 500's gain of 1.44% in that time.

BABA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $3.21, up 22.99% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.04 billion, up 38.14% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.06 per share and revenue of $104.03 billion, which would represent changes of +34.49% and +43.04%, respectively, from the prior year.

Any recent changes to analyst estimates for BABA should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. BABA currently has a Zacks Rank of #3 (Hold).

Investors should also note BABA's current valuation metrics, including its Forward P/E ratio of 22.62. This represents a discount compared to its industry's average Forward P/E of 47.22.

Meanwhile, BABA's PEG ratio is currently 1.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Commerce industry currently had an average PEG ratio of 2.4 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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