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Alibaba (BABA) Dips More Than Broader Markets: What You Should Know

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Alibaba (BABA) closed at $86.48 in the latest trading session, marking a -1.72% move from the prior day. This change lagged the S&P 500's daily loss of 0.4%. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq lost 0.18%.

Heading into today, shares of the online retailer had lost 7.85% over the past month, outpacing the Retail-Wholesale sector's loss of 15.28% and the S&P 500's loss of 9.39% in that time.

Investors will be hoping for strength from Alibaba as it approaches its next earnings release, which is expected to be May 26, 2022. On that day, Alibaba is projected to report earnings of $1.06 per share, which would represent a year-over-year decline of 32.91%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.76 billion, up 7.55% from the year-ago period.

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 company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Alibaba currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Alibaba currently has a Forward P/E ratio of 11.84. This valuation marks a discount compared to its industry's average Forward P/E of 21.6.

It is also worth noting that BABA currently has a PEG ratio of 1.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BABA's industry had an average PEG ratio of 1.26 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 228, which puts it in the bottom 10% 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.

To follow BABA in the coming trading sessions, be sure to utilize Zacks.com.


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