Alibaba (BABA) Ascends While Market Falls: Some Facts to Note

Alibaba (BABA) closed the most recent trading day at $89.99, moving +0.96% from the previous trading session. This change outpaced the S&P 500's 1.46% loss on the day. Meanwhile, the Dow experienced a rise of 0.65%, and the technology-dominated Nasdaq saw a decrease of 3.07%.

Coming into today, shares of the online retailer had gained 4.8% in the past month. In that same time, the Retail-Wholesale sector gained 2.27%, while the S&P 500 gained 1.08%.

The upcoming earnings release of Alibaba will be of great interest to investors. The company's upcoming EPS is projected at $3.08, signifying a 15.36% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $38.46 billion, up 4.88% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $8.72 per share and a revenue of $137.85 billion, demonstrating changes of +1.16% and +5.63%, respectively, from the preceding year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Alibaba. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 6.82% lower. Alibaba is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Alibaba is presently being traded at a Forward P/E ratio of 10.23. This expresses a discount compared to the average Forward P/E of 21.67 of its industry.

Meanwhile, BABA's PEG ratio is currently 0.34. 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. The average PEG ratio for the Internet - Commerce industry stood at 1.18 at the close of the market yesterday.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 70, putting it in the top 28% of all 250+ industries.