Alibaba (BABA) Stock Sinks As Market Gains: What You Should Know

Alibaba (BABA) closed the most recent trading day at $186.94, moving -0.08% from the previous trading session. This change lagged the S&P 500's daily gain of 0.11%. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq added 0.19%.

Heading into today, shares of the online retailer had gained 5.27% over the past month, outpacing the Retail-Wholesale sector's gain of 5.17% and the S&P 500's gain of 4.42% in that time.

BABA will be looking to display strength as it nears its next earnings release, which is expected to be May 15, 2019. On that day, BABA is projected to report earnings of $1.05 per share, which would represent year-over-year growth of 15.38%. Our most recent consensus estimate is calling for quarterly revenue of $13.47 billion, up 36.39% from the year-ago period.

Any recent changes to analyst estimates for BABA should also be noted by investors. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.69% lower. BABA is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, BABA is currently trading at a Forward P/E ratio of 28.74. For comparison, its industry has an average Forward P/E of 29.4, which means BABA is trading at a discount to the group.

It is also worth noting that BABA currently has a PEG ratio of 1.16. 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 2.23 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 174, putting it in the bottom 32% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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