Alibaba (BABA) closed the most recent trading day at $232.70, moving +0.27% from the previous trading session. The stock outpaced the S&P 500’s daily gain of 0.18%.
Prior to today’s trading, shares of the online retailer had gained 4.2% over the past month. This has outpaced the Retail-Wholesale sector’s gain of 0.73% and lagged the S&P 500’s gain of 6.99% in that time.
Investors will be hoping for strength from BABA as it approaches its next earnings release. The company is expected to report EPS of $1.91, up 46.92% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $27.92 billion, up 72.95% from the prior-year quarter.
Investors might also notice recent changes to analyst estimates for BABA. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
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.
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. The Zacks Consensus EPS estimate has moved 8.89% lower within the past month. BABA currently has a Zacks Rank of #5 (Strong Sell).
Digging into valuation, BABA currently has a Forward P/E ratio of 21.54. This represents a discount compared to its industry’s average Forward P/E of 63.91.
Also, we should mention that BABA has a PEG ratio of 1.26. 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. The Internet – Commerce industry currently had an average PEG ratio of 2.48 as of yesterday’s close.
The Internet – Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 213, which puts it in the bottom 17% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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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