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Alibaba (BABA) Dips More Than Broader Markets: What You Should Know

In the latest trading session, Alibaba (BABA) closed at $234.78, marking a -1.64% move from the previous day. This move lagged the S&P 500's daily loss of 0.53%.

Coming into today, shares of the online retailer had gained 0.96% in the past month. In that same time, the Retail-Wholesale sector gained 1.92%, while the S&P 500 gained 5.72%.

BABA will be looking to display strength as it nears its next earnings release. In that report, analysts expect BABA to post earnings of $1.91 per share. This would mark year-over-year growth of 46.92%. Meanwhile, our latest consensus estimate is calling for revenue of $27.92 billion, up 72.95% from the prior-year quarter.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 7.53% lower within the past month. BABA is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, BABA is currently trading at a Forward P/E ratio of 21.94. This valuation marks a discount compared to its industry's average Forward P/E of 64.39.

We can also see that BABA currently has a PEG ratio of 1.21. 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 2.52 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 216, which puts it in the bottom 15% 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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