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Alibaba (BABA) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Alibaba (BABA - Free Report) closed at $219.53, marking a -2.57% move from the previous day. This change lagged the S&P 500's daily loss of 1.04%.

Prior to today's trading, shares of the online retailer had lost 1.28% over the past month. This has lagged the Retail-Wholesale sector's gain of 1.76% and the S&P 500's gain of 3.83% in that time.

Investors will be hoping for strength from BABA as it approaches its next earnings release, which is expected to be May 13, 2021. The company is expected to report EPS of $1.91, up 46.92% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $27.92 billion, up 72.95% from the year-ago period.

Investors might also notice recent changes to analyst estimates for BABA. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. The Zacks Consensus EPS estimate has moved 8.89% lower within the past month. BABA is holding a Zacks Rank of #5 (Strong Sell) right now.

Valuation is also important, so investors should note that BABA has a Forward P/E ratio of 20.92 right now. This represents a discount compared to its industry's average Forward P/E of 60.87.

Meanwhile, BABA's PEG ratio is currently 1.22. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Commerce was holding an average PEG ratio of 2.14 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 232, which puts it in the bottom 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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