Alibaba (BABA) closed the most recent trading day at $122.58, moving +1.55% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.78%. Elsewhere, the Dow gained 1.14%, while the tech-heavy Nasdaq added 0.61%.
The stock of online retailer has risen by 3.16% in the past month, lagging the Retail-Wholesale sector's gain of 5.49% and the S&P 500's gain of 5.88%.
The upcoming earnings release of Alibaba will be of great interest to investors. The company is forecasted to report an EPS of $2.13, showcasing a 5.75% downward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $34.26 billion, up 2.37% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.58 per share and a revenue of $141.93 billion, signifying shifts of -4.77% and +2.75%, respectively, from the last year.
Investors should also take note of any recent adjustments to analyst estimates for Alibaba. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 19.39% decrease. Alibaba presently features a Zacks Rank of #5 (Strong Sell).
In terms of valuation, Alibaba is currently trading at a Forward P/E ratio of 14.08. This denotes a discount relative to the industry average Forward P/E of 22.7.
We can additionally observe that BABA currently boasts a PEG ratio of 1.62. 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. As the market closed yesterday, the Internet - Commerce industry was having an average PEG ratio of 1.66.
The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 68, placing it within the top 28% of over 250 industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. 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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Alibaba Group Holding Limited (BABA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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