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Alibaba (BABA) Outpaces Stock Market Gains: What You Should Know

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Alibaba (BABA - Free Report) closed the most recent trading day at $166.38, moving +0.44% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.28%. At the same time, the Dow added 0.21%, and the tech-heavy Nasdaq gained 0.65%.

Heading into today, shares of the online retailer had lost 7.34% over the past month, lagging the Retail-Wholesale sector's gain of 1.13% and the S&P 500's gain of 0.86% 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. The company is expected to report EPS of $1.23, down 4.65% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $12.95 billion, up 56.29% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.60 per share and revenue of $57.83 billion, which would represent changes of +6.87% and +50.9%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for BABA. Recent revisions tend to reflect the latest 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. The Zacks Consensus EPS estimate has moved 2.58% lower within the past month. BABA is currently a Zacks Rank #5 (Strong Sell).

Investors should also note BABA's current valuation metrics, including its Forward P/E ratio of 29.55. For comparison, its industry has an average Forward P/E of 29.22, which means BABA is trading at a premium to the group.

It is also worth noting that BABA currently has a PEG ratio of 0.86. 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. BABA's industry had an average PEG ratio of 2.15 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 217, which puts 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.

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

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