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While growth is established for NYSE:BABA, the stock's valuation remains reasonable.

By Mill Chart

Last update: Sep 29, 2023

Discover ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA), an undervalued growth gem identified by our stock screener. NYSE:BABA is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Analyzing Growth Metrics

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:BABA, the assigned 7 reflects its growth potential:

  • The Earnings Per Share has grown by an impressive 26.33% over the past year.
  • BABA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.68% yearly.
  • BABA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.26% yearly.
  • Based on estimates for the next years, BABA will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.82% on average per year.
  • The Revenue is expected to grow by 9.65% on average over the next years. This is quite good.

Evaluating Valuation: NYSE:BABA

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:BABA has earned a 8 for valuation:

  • Based on the Price/Earnings ratio of 10.37, the valuation of BABA can be described as reasonable.
  • Based on the Price/Earnings ratio, BABA is valued cheaper than 85.29% of the companies in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 25.79, BABA is valued rather cheaply.
  • BABA is valuated reasonably with a Price/Forward Earnings ratio of 8.38.
  • 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's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 18.89.
  • Based on the Enterprise Value to EBITDA ratio, BABA is valued cheaper than 85.29% of the companies in the same industry.
  • BABA's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. BABA is cheaper than 76.47% of the companies in the same industry.
  • The 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.
  • A more expensive valuation may be justified as BABA's earnings are expected to grow with 15.16% in the coming years.

Health Examination for NYSE:BABA

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:BABA has earned a 6 out of 10:

  • BABA has a better Altman-Z score (2.73) 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.
  • BABA has a better Debt to FCF ratio (0.78) than 82.35% of its industry peers.
  • A Debt/Equity ratio of 0.15 indicates that BABA is not too dependend on debt financing.
  • Looking at the Current ratio, with a value of 1.92, BABA is in the better half of 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

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:BABA, the assigned 6 is a significant indicator of profitability:

  • The Return On Assets of BABA (4.73%) is better than 79.41% of its industry peers.
  • BABA has a Return On Equity of 8.22%. This is in the better half of the industry: BABA outperforms 73.53% of its industry peers.
  • 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.
  • BABA has a better Profit Margin (9.37%) than 91.18% of its industry peers.
  • BABA has a Operating Margin of 13.67%. This is amongst the best in the industry. BABA outperforms 88.24% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of BABA


Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.



NYSE:BABA (12/8/2023, 7:04:00 PM)

After market: 72.01 -0.13 (-0.18%)


-0.19 (-0.26%)


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ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA): good value for what you're paying.

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