Alibaba (BABA) Stock Sinks As Market Gains: What You Should Know
Alibaba (BABA) closed the most recent trading day at $102.18, moving -1.16% from the previous trading session. This move lagged the S&P 500's daily gain of 1.44%. At the same time, the Dow added 1.26%, and the tech-heavy Nasdaq gained 5.21%.
Heading into today, shares of the online retailer had gained 15.19% over the past month, outpacing the Retail-Wholesale sector's gain of 2.17% and the S&P 500's gain of 2.28% in that time.
Wall Street will be looking for positivity from Alibaba as it approaches its next earnings report date. On that day, Alibaba is projected to report earnings of $1.64 per share, which would represent year-over-year growth of 31.2%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.91 billion, down 3.98% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.80 per share and revenue of $126.7 billion, which would represent changes of -6.14% and -4.92%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Alibaba. These revisions help to show the ever-changing nature of 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. 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, 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 5.9% higher. Alibaba is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note Alibaba's current valuation metrics, including its Forward P/E ratio of 13.25. This represents a discount compared to its industry's average Forward P/E of 18.08.
It is also worth noting that BABA currently has a PEG ratio of 1.04. 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. The Internet - Commerce industry currently had an average PEG ratio of 1.16 as of yesterday's close.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 79, putting it in the top 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
To read this article on Zacks.com click here.