Alibaba (BABA) closed the most recent trading day at $179.45, moving +2.72% from the previous trading session. This change outpaced the S&P 500’s 1.23% gain on the day. Elsewhere, the Dow gained 0.72%, while the tech-heavy Nasdaq added 1.86%.
Heading into today, shares of the online retailer had gained 1.62% over the past month, outpacing the Retail-Wholesale sector’s loss of 1.39% and lagging the S&P 500’s gain of 2.45%.
The investment community will be closely monitoring the performance of Alibaba in its forthcoming earnings report. In that report, analysts expect Alibaba to post earnings of $0.66 per share. This would mark a year-over-year decline of 69.3%. Meanwhile, the latest consensus estimate predicts the revenue to be $34.43 billion, indicating a 2.17% increase compared to the same quarter of the previous year.
BABA’s full-year Zacks Consensus Estimates are calling for earnings of $6.57 per share and revenue of $144.67 billion. These results would represent year-over-year changes of -27.08% and +4.73%, respectively.
Investors might also notice recent changes to analyst estimates for Alibaba. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the past month, the Zacks Consensus EPS estimate has shifted 16.33% downward. At present, Alibaba boasts a Zacks Rank of #5 (Strong Sell).
Digging into valuation, Alibaba currently has a Forward P/E ratio of 26.58. This represents a premium compared to its industry average Forward P/E of 23.26.
We can additionally observe that BABA currently boasts a PEG ratio of 2.09. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. The Internet – Commerce was holding an average PEG ratio of 1.47 at yesterday’s closing price.
The Internet – Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 88, finds itself in the top 36% echelons of all 250+ industries.
