Alibaba (BABA) ended the recent trading session at $160.80, demonstrating a -3.07% change from the preceding day's closing price. This change lagged the S&P 500's daily gain of 0.21%. On the other hand, the Dow registered a gain of 1.18%, and the technology-centric Nasdaq decreased by 0.25%.
Heading into today, shares of the online retailer had lost 0.55% over the past month, lagging the Retail-Wholesale sector's gain of 5.47% and the S&P 500's gain of 4.36%.
Analysts and investors alike will be keeping a close eye on the performance of Alibaba in its upcoming earnings disclosure. 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.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $6.57 per share and revenue of $144.67 billion. These totals would mark changes of -27.08% and +4.73%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Alibaba. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 witnessed an unchanged state. Alibaba is currently sporting a Zacks Rank of #5 (Strong Sell).
Valuation is also important, so investors should note that Alibaba has a Forward P/E ratio of 25.24 right now. Its industry sports an average Forward P/E of 21.83, so one might conclude that Alibaba is trading at a premium comparatively.
It's also important to note that BABA currently trades at a PEG ratio of 1.99. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Internet - Commerce industry was having an average PEG ratio of 1.5.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 151, finds itself in the bottom 39% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next 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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