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

In the latest trading session, Alibaba (BABA) closed at $243.46, marking a +0.2% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.72%. At the same time, the Dow lost 0.57%, and the tech-heavy Nasdaq lost 0.87%.

Prior to today's trading, shares of the online retailer had lost 8.11% over the past month. This has lagged the Retail-Wholesale sector's gain of 0.88% and the S&P 500's gain of 4.69% in that time.

BABA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $3.19, up 22.22% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.04 billion, up 38.15% from the year-ago period.

BABA's full-year Zacks Consensus Estimates are calling for earnings of $10.08 per share and revenue of $104.64 billion. These results would represent year-over-year changes of +34.76% and +43.88%, respectively.

Investors might also notice recent changes to analyst estimates for BABA. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.51% lower. BABA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, BABA is holding a Forward P/E ratio of 24.1. For comparison, its industry has an average Forward P/E of 51.04, which means BABA is trading at a discount to the group.

Meanwhile, BABA's PEG ratio is currently 1.23. 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. BABA's industry had an average PEG ratio of 2.59 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 228, which puts it in the bottom 11% 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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