Alibaba (BABA) closed the most recent trading day at $101.82, moving -2.49% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 1.21% for the day. On the other hand, the Dow registered a gain of 0.02%, and the technology-centric Nasdaq decreased by 2.6%.
Shares of the online retailer have depreciated by 5.77% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 3.07%, and the S&P 500's loss of 0.03%.
The investment community will be closely monitoring the performance of Alibaba in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $1.46, reflecting a 139.34% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $40.35 billion, indicating a 15.93% 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 $6.35 per share and revenue of $166.47 billion. These totals would mark changes of +63.24% and +14.5%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Alibaba. 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 business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.46% lower. As of now, Alibaba holds a Zacks Rank of #3 (Hold).
Looking at its valuation, Alibaba is holding a Forward P/E ratio of 16.45. This valuation marks a premium compared to its industry average Forward P/E of 15.42.
It is also worth noting that BABA currently has a PEG ratio of 1.23. 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 1.25 as of yesterday's close.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 160, finds itself in the bottom 35% echelons of all 250+ industries.
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 follow all of these stock-moving metrics, and many more, on Zacks.com.
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Alibaba Group Holding Limited (BABA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).