Alibaba Group Holding Ltd – ADR (BABA) Receives Strong Valuation Ranking of 69 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings and growth rate. BABA is worth more than 69% of stocks based on these valuation analyses. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
BABA’s trailing 12-month price-to-earnings (PE) ratio of 25.6 puts it above the historical average of around 15. BABA is a poor value at its current trading price, as investors are paying more than what its value compared to the profits of the company. BABA’s 12-month earnings per share (EPS) of 8.41 does not justify what it is currently trading at in the market. However, rolling PE ratios do not take into account a company’s projected growth rate, causing some companies to have high PE ratios due to high growth, which could attract investors even if current earnings are weak. BABA’s 12-month PE-to-Growth (PEG) ratio of 1.55 is considered a bad value because the market overvalues BABA relative to the company’s expected earnings growth. BABA’s PEG comes from the fact that its forward price/earnings ratio is divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and stock price. Due to their incorporation of more fundamentals of a company’s overall health and their focus on the future rather than the past, PEG ratios are one of the most widely used valuation measures by analysts today. today.
BABA’s valuation metrics are low at its current price due to an overvalued PEG ratio despite strong growth. BABA’s PE and PEG are below the market average, resulting in a below-average valuation score. Click here for the full Alibaba Group Holding Ltd – ADR (BABA) stock report.
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