Alibaba (BABA) closed at $171.37 in the latest trading session, marking a -1.07% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.5%. Elsewhere, the Dow gained 0.64%, while the tech-heavy Nasdaq added 0.43%.
The online retailer's shares have seen an increase of 13.79% over the last month, surpassing the Retail-Wholesale sector's gain of 5.24% and the S&P 500's gain of 0.18%.
Investors will be eagerly watching for the performance of Alibaba in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.91, indicating a 34.81% decline compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $41.26 billion, showing a 7.49% escalation compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.05 per share and a revenue of $146.7 billion, representing changes of -32.85% and +6.2%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Alibaba. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 5.61% lower. Right now, Alibaba possesses a Zacks Rank of #5 (Strong Sell).
In terms of valuation, Alibaba is presently being traded at a Forward P/E ratio of 28.63. This expresses a premium compared to the average Forward P/E of 17.36 of its industry.
One should further note that BABA currently holds a PEG ratio of 3.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BABA's industry had an average PEG ratio of 1.14 as of yesterday's close.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 196, putting it in the bottom 20% of all 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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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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