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Alibaba (BABA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
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Alibaba (BABA) closed at $187.29 in the latest trading session, marking a +1.03% move from the prior day. This move outpaced the S&P 500's daily gain of 0.88%. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq gained 1.32%.

Prior to today's trading, shares of the online retailer had gained 3.7% over the past month. This has lagged the Retail-Wholesale sector's gain of 4.72% and the S&P 500's gain of 3.96% 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 May 15, 2019. On that day, BABA is projected to report earnings of $1.05 per share, which would represent year-over-year growth of 15.38%. Meanwhile, our latest consensus estimate is calling for revenue of $13.46 billion, up 36.29% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for BABA. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. The Zacks Consensus EPS estimate has moved 5.69% lower within the past month. BABA is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that BABA has a Forward P/E ratio of 28.48 right now. This valuation marks a discount compared to its industry's average Forward P/E of 29.35.

Meanwhile, BABA's PEG ratio is currently 1.15. 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. Internet - Commerce stocks are, on average, holding a PEG ratio of 2.18 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 189, which puts it in the bottom 26% 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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