Looking for growth without the hefty price tag? Consider NYSE:BABA.

Last update: Sep 25, 2023

Our stock screening tool has pinpointed ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) as a growth stock that isn't overvalued. NYSE:BABA is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

What does the Growth looks like for NYSE:BABA

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:BABA scores a 7 out of 10:

BABA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.33%, which is quite impressive.
The Earnings Per Share has been growing by 10.68% on average over the past years. This is quite good.
The Revenue has been growing by 28.26% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 11.82% on average over the next years. This is quite good.
The Revenue is expected to grow by 9.65% on average over the next years. This is quite good.

Evaluating Valuation: NYSE:BABA

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:BABA was assigned a score of 8 for valuation:

A Price/Earnings ratio of 10.70 indicates a reasonable valuation of BABA.
Based on the Price/Earnings ratio, BABA is valued cheaply inside the industry as 82.35% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.89. BABA is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 8.65, the valuation of BABA can be described as very reasonable.
BABA's Price/Forward Earnings ratio is rather cheap when compared to the industry. BABA is cheaper than 82.35% of the companies in the same industry.
BABA is valuated cheaply when we compare the Price/Forward Earnings ratio to 18.97, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, BABA is valued cheaper than 85.29% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, BABA is valued a bit cheaper than the industry average as 76.47% of the companies are valued more expensively.
BABA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of BABA may justify a higher PE ratio.
BABA's earnings are expected to grow with 15.16% in the coming years. This may justify a more expensive valuation.

Assessing Health for NYSE:BABA

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:BABA has received a 6 out of 10:

The Altman-Z score of BABA (2.77) is better than 64.71% of its industry peers.
The Debt to FCF ratio of BABA is 0.78, which is an excellent value as it means it would take BABA, only 0.78 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.78, BABA belongs to the best of the industry, outperforming 82.35% of the companies in the same industry.
BABA has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
With a decent Current ratio value of 1.92, BABA is doing good in the industry, outperforming 61.76% of the companies in the same industry.
BABA's Quick ratio of 1.92 is fine compared to the rest of the industry. BABA outperforms 76.47% of its industry peers.

Exploring NYSE:BABA's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:BABA has achieved a 6:

BABA has a better Return On Assets (4.73%) than 79.41% of its industry peers.
Looking at the Return On Equity, with a value of 8.22%, BABA is in the better half of the industry, outperforming 73.53% of the companies in the same industry.
BABA has a better Return On Invested Capital (6.04%) than 67.65% of its industry peers.
The 3 year average ROIC (5.01%) for BABA is below the current ROIC(6.04%), indicating increased profibility in the last year.
With an excellent Profit Margin value of 9.37%, BABA belongs to the best of the industry, outperforming 91.18% of the companies in the same industry.
Looking at the Operating Margin, with a value of 13.67%, BABA belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Our latest full fundamental report of BABA contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.