Alibaba (BABA) Outperforms Broader Market: What You Need to Know

In the latest trading session, Alibaba (BABA) closed at $132.64, marking a +1.41% move from the previous day. The stock's change was more than the S&P 500's daily gain of 0.83%. Meanwhile, the Dow gained 0.5%, and the Nasdaq, a tech-heavy index, added 1.38%.

Heading into today, shares of the online retailer had lost 19.52% over the past month, lagging the Retail-Wholesale sector's loss of 3.2% and the S&P 500's loss of 2.65%.

The investment community will be closely monitoring the performance of Alibaba in its forthcoming earnings report. The company is scheduled to release its earnings on March 19, 2026. The company's earnings per share (EPS) are projected to be $1.91, reflecting a 34.81% decrease from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $41.26 billion, showing a 7.49% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.96 per share and revenue of $148.1 billion, indicating changes of -33.85% and +7.21%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Alibaba. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.28% downward. At present, Alibaba boasts a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Alibaba is presently being traded at a Forward P/E ratio of 21.94. Its industry sports an average Forward P/E of 15.82, so one might conclude that Alibaba is trading at a premium comparatively.

Investors should also note that BABA has a PEG ratio of 2.54 right now. 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 0.9 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 164, putting it in the bottom 34% of all 250+ industries.

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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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