Back to top

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

Read MoreHide Full Article

Alibaba (BABA - Free Report) closed the most recent trading day at $180.73, moving +0.18% from the previous trading session. This change lagged the S&P 500's 0.3% gain on the day. Elsewhere, the Dow lost 0.38%, while the tech-heavy Nasdaq added 0.44%.

Coming into today, shares of the online retailer had gained 7.74% in the past month. In that same time, the Retail-Wholesale sector gained 2.95%, while the S&P 500 gained 2.91%.

Wall Street will be looking for positivity from BABA as it approaches its next earnings report date. On that day, BABA is projected to report earnings of $1.07 per share, which would represent year-over-year growth of 17.58%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.50 billion, up 36.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.42 per share and revenue of $55.31 billion. These totals would mark changes of +3.44% and +44.33%, respectively, from last year.

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

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. The Zacks Consensus EPS estimate remained stagnant within the past month. BABA is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that BABA has a Forward P/E ratio of 33.26 right now. This represents a premium compared to its industry's average Forward P/E of 27.49.

It is also worth noting that BABA currently has a PEG ratio of 1.18. 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 industry currently had an average PEG ratio of 2.19 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 192, putting it in the bottom 25% 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.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Alibaba Group Holding Limited (BABA) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in