What do the fundamentals predict for Alibaba Group Holding Ltd?

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Investors Observer gives Alibaba Group Holding Ltd – ADR (BABA) a strong valuation score of 78 according to its analysis. The proprietary rating system takes into account the underlying health of a company by analyzing its stock price, earnings and rate of growth. BABA currently holds a better value than 78% of the shares based on these metrics. Long-term buy and hold investors should find the most relevant valuation ranking system when making investment decisions.

BABA achieves an evaluation ranking of 78 today. Find out what this means for you and get the rest of the leaderboard on BABA!

Metrics analysis

BABA has a 12-month price-to-earnings (PE) ratio of 17.6. The historical average of around 15 shows an average value for BABA stock, as investors pay fair prices to the company’s profits. BABA’s average trailing PE ratio shows that the company has recently traded around its fair market value. Its 12-month rolling earnings per share (EPS) of 8.41 justifies the current share price. However, leakage PE ratios do not take into account the company’s projected growth rate, so many newer companies have high PE ratios due to high growth potential attracting investors despite insufficient profits. BABA’s 12-month PE / Growth Ratio (PEG) of 1.45 is considered mediocre value as the market overvalues ​​BABA relative to the company’s expected earnings growth. BABA’s PEG is derived from its forward price / earnings ratio divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and the stock price. Due to their incorporation of more fundamentals of the overall health of a business and their focus on the future rather than the past, PEG ratios are one of the most widely used valuation metrics by analysts today. ‘hui.

Summary

BABA’s valuation measures are weak 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 lower than average review score. Click here for the full share report of Alibaba Group Holding Ltd – ADR (BABA).

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