Market Volatility: Alibaba (BABA) Surges Amidst Overall Downturn

Market Volatility: Alibaba (BABA) Surges Amidst Overall Downturn

In the latest market close, Alibaba (BABA) reached $73.37, with a +1.4% movement compared to the previous day. The stock outperformed the S&P 500, which registered a daily loss of 0.2%. At the same time, the Dow lost 0.6%, and the tech-heavy Nasdaq gained 0.11%.

Prior to today’s trading, shares of the online retailer had lost 3.03% over the past month. This has lagged the Retail-Wholesale sector’s gain of 2.13% and the S&P 500’s gain of 3.32% in that time.

The investment community will be closely monitoring the performance of Alibaba in its forthcoming earnings report. It is anticipated that the company will report an EPS of $1.56, marking stability compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $31.19 billion, indicating a 2.89% increase compared to the same quarter of the previous year.

It’s also important for investors to be aware of any recent modifications to analyst estimates for Alibaba. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the company’s business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Alibaba is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Alibaba is currently trading at a Forward P/E ratio of 8.16. This signifies a discount in comparison to the average Forward P/E of 19.33 for its industry.

The Internet – Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 59, this industry ranks in the top 24% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don’t forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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