Alibaba (BABA - Free Report) closed at $154.64 in the latest trading session, marking a -1.02% move from the prior day. The stock lagged the S&P 500's daily loss of 0.55%. At the same time, the Dow lost 0.68%, and the tech-heavy Nasdaq lost 1.16%.
Prior to today's trading, shares of the online retailer had lost 2.34% over the past month. This has outpaced the Retail-Wholesale sector's loss of 4% and lagged the S&P 500's gain of 0.37% in that time.
BABA will be looking to display strength as it nears 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.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.60 per share and revenue of $57.83 billion. These totals would mark changes of +6.87% and +50.9%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for BABA. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Within the past 30 days, our consensus EPS projection has moved 2.58% lower. 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 27.9. For comparison, its industry has an average Forward P/E of 27.87, which means BABA is trading at a premium to the group.
Also, we should mention that BABA has a PEG ratio of 0.81. 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. Internet - Commerce stocks are, on average, holding a PEG ratio of 2.05 based on yesterday's closing prices.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.