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Alibaba (BABA) Soars 14.7%: Is Further Upside Left in the Stock?

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Alibaba (BABA - Free Report) shares ended the last trading session 14.7% higher at $119.62. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 23.4% gain over the past four weeks.

Alibaba extended its rally, driven by the recent early-stage discussions among the Chinese financial regulators regarding the revival of Ant Group’s initial public offering. Reportedly, a team has been created by the China Securities Regulatory Commission to reassess Ant Group’s share sale plans.

This online retailer is expected to post quarterly earnings of $1.70 per share in its upcoming report, which represents a year-over-year change of -33.9%. Revenues are expected to be $31.38 billion, down 1.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Alibaba, the consensus EPS estimate for the quarter has been revised 12.6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on BABA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Alibaba is a member of the Zacks Internet - Commerce industry. One other stock in the same industry, Travelzoo (TZOO - Free Report) , finished the last trading session 1.7% lower at $6.96. TZOO has returned 5.7% over the past month.

Travelzoo's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.15. Compared to the company's year-ago EPS, this represents a change of -31.8%. Travelzoo currently boasts a Zacks Rank of #2 (Buy).


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