In the latest trading session, Alibaba (BABA) closed at $162.93, marking a -2.33% move from the previous day. This change lagged the S&P 500's 0.16% loss on the day. Elsewhere, the Dow saw an upswing of 0.44%, while the tech-heavy Nasdaq depreciated by 0.76%.
The online retailer's stock has climbed by 5.55% in the past month, exceeding the Retail-Wholesale sector's loss of 4.08% and the S&P 500's gain of 1.14%.
The investment community will be closely monitoring the performance of Alibaba in its forthcoming earnings report. The company is expected to report EPS of $0.66, down 69.3% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $34.43 billion, showing a 2.17% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $6.97 per share and a revenue of $144.68 billion, demonstrating changes of -22.64% and +4.73%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for Alibaba. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 last 30 days, the Zacks Consensus EPS estimate has moved 14.81% lower. Alibaba currently has a Zacks Rank of #4 (Sell).
Looking at its valuation, Alibaba is holding a Forward P/E ratio of 23.92. This valuation marks a premium compared to its industry average Forward P/E of 21.38.
We can additionally observe that BABA currently boasts a PEG ratio of 1.88. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Internet - Commerce industry had an average PEG ratio of 1.45.
The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 88, placing it within the top 36% 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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