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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 $83.55, marking a -1.23% move from the previous day. This move lagged the S&P 500's daily gain of 0.45%. Meanwhile, the Dow gained 0.8%, and the Nasdaq, a tech-heavy index, added 1.99%.

Prior to today's trading, shares of the online retailer had gained 6.34% over the past month. This has outpaced the Retail-Wholesale sector's gain of 5% and the S&P 500's gain of 4.25% in that time.

Investors will be hoping for strength from Alibaba as it approaches its next earnings release. In that report, analysts expect Alibaba to post earnings of $1.87 per share. This would mark year-over-year growth of 6.86%. Meanwhile, our latest consensus estimate is calling for revenue of $31.27 billion, up 1.89% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.99 per share and revenue of $135.54 billion, which would represent changes of +0.63% and +7.53%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Alibaba. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.74% lower. Alibaba is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Alibaba is holding a Forward P/E ratio of 10.59. This valuation marks a discount compared to its industry's average Forward P/E of 19.48.

Investors should also note that BABA has a PEG ratio of 0.78 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Commerce was holding an average PEG ratio of 0.98 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% 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.

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


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