Benzinga - by Zacks, Benzinga Contributor.
In the latest market close, Alibaba (NYSE: BABA) reached $75.11, with a +0.64% movement compared to the previous day. This change outpaced the S&P 500's 0.46% loss on the day. At the same time, the Dow lost 0.98%, and the tech-heavy Nasdaq lost 0.64%.
Shares of the online retailer witnessed a gain of 4.25% over the previous month, beating the performance of the Retail-Wholesale sector with its loss of 3.05% and the S&P 500's loss of 3.04%.
Market participants will be closely following the financial results of Alibaba in its upcoming release. The company is expected to report EPS of $1.20, down 23.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.83 billion, up 1.7% from the year-ago period.
Investors should also take note of any recent adjustments to analyst estimates for Alibaba. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 9.8% decrease. As of now, Alibaba holds a Zacks Rank of #4 (Sell).
From a valuation perspective, Alibaba is currently exchanging hands at a Forward P/E ratio of 9.01. This expresses a discount compared to the average Forward P/E of 21.16 of its industry.
The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 38, placing it within the top 16% of over 250 industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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