Alibaba (BABA) Stock Sinks As Market Gains: What You Should Know
Alibaba (BABA) closed at $205.48 in the latest trading session, marking a -0.22% move from the prior day. This change lagged the S&P 500's 0.35% gain on the day.
Prior to today's trading, shares of the online retailer had lost 2.69% over the past month. This has lagged the Retail-Wholesale sector's gain of 3.99% and the S&P 500's gain of 3.64% in that time.
BABA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.84, up 35.24% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $32.88 billion, up 51.08% from the prior-year quarter.
BABA's full-year Zacks Consensus Estimates are calling for earnings of $11.20 per share and revenue of $142.96 billion. These results would represent year-over-year changes of +12.68% and +33.51%, respectively.
Investors might also notice recent changes to analyst estimates for BABA. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.41% lower within the past month. BABA is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, BABA is currently trading at a Forward P/E ratio of 18.39. For comparison, its industry has an average Forward P/E of 61.5, which means BABA is trading at a discount to the group.
Also, we should mention that BABA has a PEG ratio of 1.07. 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. The Internet - Commerce industry currently had an average PEG ratio of 1.84 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
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