Alibaba (BABA) closed the most recent trading day at $132.52, moving -2.43% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.12%. Elsewhere, the Dow lost 0.13%, while the tech-heavy Nasdaq added 0.2%.
Prior to today's trading, shares of the online retailer had gained 10.7% lagged the Retail-Wholesale sector's gain of 12.69% and outpaced the S&P 500's gain of 9.3%.
Market participants will be closely following the financial results of Alibaba in its upcoming release. It is anticipated that the company will report an EPS of $1.22, marking a 29.48% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $35.23 billion, up 8.12% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.08 per share and a revenue of $148.97 billion, indicating changes of -43.62% and +7.84%, respectively, from the former year.
Investors should also pay attention to any latest changes in analyst estimates for Alibaba. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 3.48% decrease. Right now, Alibaba possesses a Zacks Rank of #5 (Strong Sell).
In the context of valuation, Alibaba is at present trading with a Forward P/E ratio of 18.87. This indicates a premium in contrast to its industry's Forward P/E of 16.89.
It's also important to note that BABA currently trades at a PEG ratio of 2.18. 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. By the end of yesterday's trading, the Internet - Commerce industry had an average PEG ratio of 0.9.
The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 164, this industry ranks in the bottom 33% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. 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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This article originally published on Zacks Investment Research (zacks.com).