In the latest trading session, Alibaba (BABA - Free Report) closed at $162.37, marking a +1.73% move from the previous day. This change outpaced the S&P 500's 0.22% loss on the day. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq lost 0.26%.
Prior to today's trading, shares of the online retailer had lost 9.77% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.91% and the S&P 500's gain of 1.28% in that time.
Investors will be hoping for strength from BABA as it approaches its next earnings release, which is expected to be November 1, 2018. In that report, analysts expect BABA to post earnings of $1.25 per share. This would mark a year-over-year decline of 3.1%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.03 billion, up 57.25% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.69 per share and revenue of $58.11 billion, which would represent changes of +8.59% and +51.63%, respectively, from the prior year.
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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 15.93% lower. BABA currently has a Zacks Rank of #5 (Strong Sell).
Investors should also note BABA's current valuation metrics, including its Forward P/E ratio of 28.11. For comparison, its industry has an average Forward P/E of 29.4, which means BABA is trading at a discount to the group.
Investors should also note that BABA has a PEG ratio of 0.81 right now. 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. Internet - Commerce stocks are, on average, holding a PEG ratio of 2.04 based on yesterday's closing prices.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 216, putting it in the bottom 15% 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.
To follow BABA in the coming trading sessions, be sure to utilize Zacks.com.