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

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In the latest trading session, Alibaba (BABA) closed at $156.26, marking a -1.01% move from the previous day. This change lagged the S&P 500's 0.16% loss on the day.

Coming into today, shares of the online retailer had lost 8.41% in the past month. In that same time, the Retail-Wholesale sector lost 0.05%, while the S&P 500 gained 0.46%.

Wall Street will be looking for positivity from BABA as it approaches its next earnings report date. On that day, BABA is projected to report earnings of $2.11 per share, which would represent a year-over-year decline of 20.38%. Our most recent consensus estimate is calling for quarterly revenue of $32.52 billion, up 42.41% from the year-ago period.

BABA's full-year Zacks Consensus Estimates are calling for earnings of $9.73 per share and revenue of $142.18 billion. These results would represent year-over-year changes of -2.11% and +32.77%, respectively.

Investors should also note any recent changes to analyst estimates for BABA. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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. BABA is currently a Zacks Rank #3 (Hold).

Digging into valuation, BABA currently has a Forward P/E ratio of 16.23. For comparison, its industry has an average Forward P/E of 49.29, which means BABA is trading at a discount to the group.

Also, we should mention that BABA has a PEG ratio of 1.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Commerce industry currently had an average PEG ratio of 2.2 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 203, putting it in the bottom 21% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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