In the latest trading session, Alibaba (BABA - Free Report) closed at $163.73, marking a +1.78% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.09%. Elsewhere, the Dow gained 1.13%, while the tech-heavy Nasdaq added 1.51%.
Coming into today, shares of the online retailer had gained 6.35% in the past month. In that same time, the Retail-Wholesale sector gained 3.9%, while the S&P 500 gained 1.92%.
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. In that report, analysts expect BABA to post earnings of $1.67 per share. This would mark year-over-year growth of 2.45%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.25 billion, up 35.18% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.20 per share and revenue of $55.18 billion, which would represent changes of -0.76% and +43.99%, respectively, from the prior 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
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 6.5% lower. BABA is currently a Zacks Rank #3 (Hold).
Looking at its valuation, BABA is holding a Forward P/E ratio of 30.93. Its industry sports an average Forward P/E of 23.09, so we one might conclude that BABA is trading at a premium comparatively.
Also, we should mention that BABA has a PEG ratio of 0.99. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BABA's industry had an average PEG ratio of 2.11 as of yesterday's close.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 178, putting it in the bottom 31% 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.
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