Alibaba (BABA) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, Alibaba (BABA) closed at $100.38, marking a -0.82% move from the previous day. This move lagged the S&P 500's daily gain of 0.48%. Meanwhile, the Dow gained 0.2%, and the Nasdaq, a tech-heavy index, added 0.19%.
Prior to today's trading, shares of the online retailer had lost 13.86% over the past month. This has lagged the Retail-Wholesale sector's loss of 10.21% and the S&P 500's loss of 8.48% in that time.
Wall Street will be looking for positivity from Alibaba as it approaches its next earnings report date. On that day, Alibaba is projected to report earnings of $1.06 per share, which would represent a year-over-year decline of 32.91%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.76 billion, up 7.55% from the year-ago period.
Investors might also notice recent changes to analyst estimates for Alibaba. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
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 has moved 0.54% higher. Alibaba is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Alibaba is holding a Forward P/E ratio of 13.62. Its industry sports an average Forward P/E of 25.5, so we one might conclude that Alibaba is trading at a discount comparatively.
Investors should also note that BABA has a PEG ratio of 1.45 right now. 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 1.42 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 173, which puts it in the bottom 32% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
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