Alibaba (BABA) closed the most recent trading day at $107.99, moving +1.62% from the previous trading session. The stock exceeded the S&P 500, which registered a loss of 0.07% for the day. Meanwhile, the Dow experienced a drop of 0.37%, and the technology-dominated Nasdaq saw an increase of 0.03%.
Coming into today, shares of the online retailer had lost 12.52% in the past month. In that same time, the Retail-Wholesale sector gained 1.87%, while the S&P 500 gained 3.94%.
The upcoming earnings release of Alibaba will be of great interest to investors. The company is expected to report EPS of $2.48, up 9.73% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $34.85 billion, indicating a 4.13% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $10.14 per share and revenue of $143.9 billion. These totals would mark changes of +12.54% and +4.17%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Alibaba. Recent revisions tend to reflect the latest near-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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 3.34% downward. As of now, Alibaba holds a Zacks Rank of #3 (Hold).
In terms of valuation, Alibaba is currently trading at a Forward P/E ratio of 10.48. This signifies a discount in comparison to the average Forward P/E of 25 for its industry.
One should further note that BABA currently holds a PEG ratio of 0.42. 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. As of the close of trade yesterday, the Internet - Commerce industry held an average PEG ratio of 1.44.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 62, finds itself in the top 26% echelons 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming 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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