NYSE:BABA, a growth stock which is not overvalued.

Our stock screener has singled out ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) as an attractive growth opportunity. NYSE:BABA is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Looking at the Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:BABA boasts 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.
• BABA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.68% yearly.
• 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.

Valuation Assessment of NYSE:BABA

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:BABA has received a 8 out of 10:

• Based on the Price/Earnings ratio of 10.19, the valuation of BABA can be described as reasonable.
• Compared to the rest of the industry, the Price/Earnings ratio of BABA indicates a rather cheap valuation: BABA is cheaper than 88.24% of the companies listed in the same industry.
• BABA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.33.
• BABA is valuated reasonably with a Price/Forward Earnings ratio of 8.23.
• 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.
• Compared to an average S&P500 Price/Forward Earnings ratio of 18.56, BABA is valued rather cheaply.
• 88.24% of the companies in the same industry are more expensive than BABA, based on the Enterprise Value to EBITDA ratio.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of BABA indicates a somewhat cheap valuation: BABA is cheaper than 79.41% of the companies listed 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.
• BABA's earnings are expected to grow with 15.16% in the coming years. This may justify a more expensive valuation.

Deciphering NYSE:BABA's Health Rating

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:BABA scores a 6 out of 10:

• BABA has a better Altman-Z score (2.71) 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.
• The Debt to FCF ratio of BABA (0.78) is better than 82.35% of its industry peers.
• BABA has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
• The Current ratio of BABA (1.92) is better than 61.76% of its industry peers.
• BABA has a better Quick ratio (1.92) than 76.47% of its industry peers.

Evaluating Profitability: NYSE:BABA

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:

• With a decent Return On Assets value of 4.73%, BABA is doing good in the industry, outperforming 79.41% of the companies in the same industry.
• 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's Return On Invested Capital of 6.04% is fine compared to the rest of the industry. BABA outperforms 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.
• Looking at the Profit Margin, with a value of 9.37%, BABA belongs to the top of the industry, outperforming 91.18% of the companies in the same industry.
• The Operating Margin of BABA (13.67%) is better than 88.24% of its industry peers.

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

Check the latest full fundamental report of BABA for a complete fundamental analysis.

Disclaimer

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.