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Alibaba (BABA) Gains But Lags Market: What You Should Know

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In the latest trading session, Alibaba (BABA - Free Report) closed at $156.44, marking a +0.28% move from the previous day. This move lagged the S&P 500's daily gain of 0.33%. Meanwhile, the Dow gained 0.44%, and the Nasdaq, a tech-heavy index, added 0.01%.

Coming into today, shares of the online retailer had gained 16.97% in the past month. In that same time, the Retail-Wholesale sector gained 0.48%, while the S&P 500 gained 0.89%.

Wall Street will be looking for positivity from BABA as it approaches its next earnings report date. This is expected to be February 7, 2019. The company is expected to report EPS of $1.67, up 2.45% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.25 billion, up 35.18% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.20 per share and revenue of $55.18 billion. These totals would mark changes of -0.76% and +43.99%, respectively, from last year.

Any recent changes to analyst estimates for BABA should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 6.5% lower. BABA is currently a Zacks Rank #3 (Hold).

Investors should also note BABA's current valuation metrics, including its Forward P/E ratio of 30. For comparison, its industry has an average Forward P/E of 26.97, which means BABA is trading at a premium to the group.

We can also see that BABA currently has a PEG ratio of 0.96. 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. The Internet - Commerce was holding an average PEG ratio of 2.11 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 143, putting it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.




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