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

In the latest trading session, Alibaba (BABA) closed at $110.20, marking a -0.9% move from the previous day. This move lagged the S&P 500's daily gain of 1.46%. Elsewhere, the Dow gained 1.09%, while the tech-heavy Nasdaq added 6.63%.

Heading into today, shares of the online retailer had gained 26.24% over the past month, outpacing the Retail-Wholesale sector's gain of 10.03% and the S&P 500's gain of 4.75% in that time.

Wall Street will be looking for positivity from Alibaba as it approaches its next earnings report date. The company is expected to report EPS of $2.25, down 15.09% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $35.85 billion, down 5.83% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.20 per share and revenue of $127.62 billion. These totals would mark changes of -13.36% and -4.24%, respectively, from last year.

Any recent changes to analyst estimates for Alibaba should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection has moved 0.68% higher. Alibaba is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Alibaba's current valuation metrics, including its Forward P/E ratio of 15.44. Its industry sports an average Forward P/E of 22.06, so we one might conclude that Alibaba is trading at a discount comparatively.

Investors should also note that BABA has a PEG ratio of 1.75 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Commerce stocks are, on average, holding a PEG ratio of 1.57 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 40, putting it in the top 16% 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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Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report

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Zacks Investment Research