Alibaba (BABA) Stock Declines While Market Improves: Some Information for Investors

Alibaba (BABA) closed at $110.71 in the latest trading session, marking a -2.86% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.48%. Meanwhile, the Dow lost 0.02%, and the Nasdaq, a tech-heavy index, added 0.94%.

Heading into today, shares of the online retailer had lost 0.87% over the past month, lagging the Retail-Wholesale sector's gain of 3.33% and the S&P 500's gain of 5.13%.

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Analysts and investors alike will be keeping a close eye on the performance of Alibaba in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $2.48, reflecting a 9.73% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $34.85 billion, indicating a 4.13% upward movement from the same quarter last year.

BABA's full-year Zacks Consensus Estimates are calling for earnings of $10.13 per share and revenue of $143.64 billion. These results would represent year-over-year changes of +12.43% and +3.99%, respectively.

Investors might also notice recent changes to analyst estimates for Alibaba. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 3.46% downward. Currently, Alibaba is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Alibaba is currently trading at a Forward P/E ratio of 11.25. This valuation marks a discount compared to its industry average Forward P/E of 25.32.

We can additionally observe that BABA currently boasts a PEG ratio of 0.46. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. BABA's industry had an average PEG ratio of 1.4 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 63, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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