Alibaba (BABA) ended the recent trading session at $108.22, demonstrating a +1.41% change from the preceding day's closing price. The stock exceeded the S&P 500, which registered a gain of 0.14% for the day. Elsewhere, the Dow gained 0.2%, while the tech-heavy Nasdaq added 0.27%.
Heading into today, shares of the online retailer had lost 5.45% over the past month, lagging the Retail-Wholesale sector's gain of 2.13% and the S&P 500's gain of 3.97%.
The upcoming earnings release of Alibaba will be of great interest to investors. The company is predicted to post an EPS of $2.26, indicating constancy compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $34.32 billion, indicating a 2.54% growth compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $9.63 per share and a revenue of $142.01 billion, representing changes of +6.88% and +2.8%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Alibaba. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 3.34% lower. As of now, Alibaba holds a Zacks Rank of #3 (Hold).
From a valuation perspective, Alibaba is currently exchanging hands at a Forward P/E ratio of 11.09. This represents a discount compared to its industry average Forward P/E of 21.74.
We can also see that BABA currently has a PEG ratio of 0.45. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Commerce industry had an average PEG ratio of 1.38 as trading concluded yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 62, placing it within the top 26% of over 250 industries.
The Zacks Industry Rank is ordered 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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Alibaba Group Holding Limited (BABA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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