Alibaba (BABA) Declines More Than Market: Some Information for Investors
Alibaba (BABA) closed the most recent trading day at $135.38, moving -3.42% from the previous trading session. This change lagged the S&P 500’s 0.64% loss on the day. Elsewhere, the Dow lost 0.59%, while the tech-heavy Nasdaq lost 0.59%.
Heading into today, shares of the online retailer had gained 11.19% over the past month, lagging the Retail-Wholesale sector’s gain of 12.67% and outpacing the S&P 500’s gain of 9.33%.
The upcoming earnings release of Alibaba will be of great interest to investors. It is anticipated that the company will report an EPS of $1.22, marking a 29.48% fall compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $35.23 billion, indicating a 8.12% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $5.08 per share and revenue of $148.97 billion, which would represent changes of -43.62% and +7.84%, respectively, from the prior year.
Investors should also take note of any recent adjustments 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 demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we’ve established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.62% lower. As of now, Alibaba holds a Zacks Rank of #5 (Strong Sell).
Investors should also note Alibaba’s current valuation metrics, including its Forward P/E ratio of 19.48. For comparison, its industry has an average Forward P/E of 17.98, which means Alibaba is trading at a premium to the group.
Meanwhile, BABA’s PEG ratio is currently 2.25. 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. As the market closed yesterday, the Internet – Commerce industry was having an average PEG ratio of 0.93.
The Internet – Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 170, finds itself in the bottom 31% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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