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

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In the latest trading session, Alibaba (BABA) closed at $134.96, marking a -1.59% move from the previous day. This change lagged the S&P 500's daily loss of 1.58%. Elsewhere, the Dow lost 1.99%, while the tech-heavy Nasdaq lost 1.63%.

Heading into today, shares of the online retailer had lost 8.21% over the past month, lagging the Retail-Wholesale sector's loss of 5.53% and the S&P 500's loss of 6.62% in that time.

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. On that day, BABA is projected to report earnings of $1.65 per share, which would represent year-over-year growth of 1.23%. Meanwhile, our latest consensus estimate is calling for revenue of $17.25 billion, up 35.18% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.20 per share and revenue of $54.91 billion. These totals would mark changes of -0.76% and +43.27%, 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. BABA is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note BABA's current valuation metrics, including its Forward P/E ratio of 26.37. Its industry sports an average Forward P/E of 21.9, so we one might conclude that BABA is trading at a premium comparatively.

It is also worth noting that BABA currently has a PEG ratio of 0.85. 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. BABA's industry had an average PEG ratio of 1.85 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 197, putting it in the bottom 23% 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.

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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