In the latest trading session, Alibaba (BABA) closed at $177.05, marking a -1.18% move from the previous day. This move lagged the S&P 500's daily loss of 0.31%. Meanwhile, the Dow lost 0.52%, and the Nasdaq, a tech-heavy index, lost 0.28%.
Prior to today's trading, shares of the online retailer had gained 7.31% over the past month. This has outpaced the Retail-Wholesale sector's gain of 5% and the S&P 500's gain of 2.92% in that time.
Investors will be hoping for strength from BABA as it approaches its next earnings release. In that report, analysts expect BABA to post earnings of $1.22 per share. This would mark year-over-year growth of 20.4%. Our most recent consensus estimate is calling for quarterly revenue of $16.82 billion, up 35.65% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.81 per share and revenue of $73.46 billion. These totals would mark changes of +61.95% and +32.09%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for BABA. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 15.28% higher within the past month. BABA is holding a Zacks Rank of #1 (Strong Buy) right now.
Looking at its valuation, BABA is holding a Forward P/E ratio of 24.93. This valuation marks a discount compared to its industry's average Forward P/E of 31.94.
Meanwhile, BABA's PEG ratio is currently 0.89. 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. The Internet - Commerce industry currently had an average PEG ratio of 1.79 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 103, which puts it in the top 41% 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.
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