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Alibaba (BABA) Falls More Steeply Than Broader Market: What Investors Need to Know

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In the latest close session, Alibaba (BABA - Free Report) was down 1.82% at $109.11. The stock trailed the S&P 500, which registered a daily loss of 1.09%. Meanwhile, the Dow experienced a drop of 0.34%, and the technology-dominated Nasdaq saw a decrease of 2.15%.

Prior to today's trading, shares of the online retailer had gained 2.39% lagged the Retail-Wholesale sector's gain of 3.71% and the S&P 500's gain of 2.44%.

Investors will be eagerly watching for the performance of Alibaba in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.46, indicating a 139.34% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $40.35 billion, up 15.93% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $6.35 per share and a revenue of $166.47 billion, demonstrating changes of +63.24% and +14.5%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Alibaba. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.43% lower. At present, Alibaba boasts a Zacks Rank of #3 (Hold).

Looking at its valuation, Alibaba is holding a Forward P/E ratio of 17.51. This indicates a premium in contrast to its industry's Forward P/E of 15.65.

Investors should also note that BABA has a PEG ratio of 1.31 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. BABA's industry had an average PEG ratio of 1.25 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 174, placing it within the bottom 30% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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