Alibaba (BABA) Stock Sinks As Market Gains: What You Should Know
Alibaba (BABA) closed the most recent trading day at $125.08, moving -0.37% from the previous trading session. This move lagged the S&P 500's daily gain of 0.31%. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.48%.
Heading into today, shares of the online retailer had lost 21.63% over the past month, lagging the Retail-Wholesale sector's loss of 2.72% and the S&P 500's loss of 0.04% in that time.
Wall Street will be looking for positivity from Alibaba as it approaches its next earnings report date. The company is expected to report EPS of $2.60, down 23.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $39.37 billion, up 16.19% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.36 per share and revenue of $135.25 billion. These totals would mark changes of -15.9% and +26.3%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Alibaba. 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. 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.
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 12.82% lower within the past month. Alibaba is currently a Zacks Rank #5 (Strong Sell).
Looking at its valuation, Alibaba is holding a Forward P/E ratio of 15.02. This represents a discount compared to its industry's average Forward P/E of 54.33.
It is also worth noting that BABA currently has a PEG ratio of 0.97. 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 2.56 as of yesterday's close.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 227, putting it in the bottom 11% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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