Alibaba (BABA) Advances But Underperforms Market: Key Facts
The latest trading session saw Alibaba (BABA) ending at $83.14, denoting a +0.39% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily gain of 1.2%. Meanwhile, the Dow gained 1.58%, and the Nasdaq, a tech-heavy index, added 1.16%.
The online retailer's stock has dropped by 4.52% in the past month, falling short of the Retail-Wholesale sector's loss of 1.94% and the S&P 500's loss of 3.58%.
The investment community will be paying close attention to the earnings performance of Alibaba in its upcoming release. In that report, analysts expect Alibaba to post earnings of $2.16 per share. This would mark year-over-year growth of 18.68%. At the same time, our most recent consensus estimate is projecting a revenue of $31.39 billion, reflecting a 7.77% rise from the equivalent quarter last year.
BABA's full-year Zacks Consensus Estimates are calling for earnings of $8.99 per share and revenue of $133.21 billion. These results would represent year-over-year changes of +13.22% and +5.68%, respectively.
It is also important to note the recent changes to analyst estimates for Alibaba. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 moved 1.1% lower. Alibaba currently has a Zacks Rank of #3 (Hold).
Digging into valuation, Alibaba currently has a Forward P/E ratio of 9.21. This signifies a discount in comparison to the average Forward P/E of 19.1 for its industry.
The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 94, placing it within the top 38% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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