NYSE:BABA is probably undervalued for the fundamentals it is displaying.

Take a closer look at ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA), a remarkable value stock uncovered by our stock screener. NYSE:BABA excels in fundamentals and maintains a very reasonable valuation. Let's break it down further.

Evaluating Valuation: NYSE:BABA

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:BABA boasts a 8 out of 10:

• A Price/Earnings ratio of 10.23 indicates a reasonable valuation of BABA.
• Compared to the rest of the industry, the Price/Earnings ratio of BABA indicates a rather cheap valuation: BABA is cheaper than 85.29% of the companies listed in the same industry.
• When comparing the Price/Earnings ratio of BABA to the average of the S&P500 Index (25.71), we can say BABA is valued rather cheaply.
• A Price/Forward Earnings ratio of 8.27 indicates a reasonable valuation of BABA.
• 82.35% of the companies in the same industry are more expensive than BABA, based on the Price/Forward Earnings ratio.
• BABA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 18.80.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BABA indicates a rather cheap valuation: BABA is cheaper than 88.24% of the companies listed in the same industry.
• 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.
• 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.

Looking at the 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:

• The Return On Assets of BABA (4.73%) is better than 82.35% of its industry peers.
• With a decent Return On Equity value of 8.22%, BABA is doing good in 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 70.59% of its industry peers.
• The last Return On Invested Capital (6.04%) for BABA is above the 3 year average (5.01%), which is a sign of increasing profitability.
• With an excellent Profit Margin value of 9.37%, BABA belongs to the best of the industry, outperforming 88.24% of the companies in the same industry.
• The Operating Margin of BABA (13.67%) is better than 85.29% of its industry peers.

A Closer Look at 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:

• With a decent Altman-Z score value of 2.72, BABA is doing good in the industry, outperforming 67.65% of the companies in the same industry.
• BABA has a debt to FCF ratio of 0.78. This is a very positive value and a sign of high solvency as it would only need 0.78 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.78, BABA belongs to the top of the industry, outperforming 82.35% of the companies in the same industry.
• A Debt/Equity ratio of 0.15 indicates that BABA is not too dependend on debt financing.
• BABA has a better Debt to Equity ratio (0.15) than 61.76% of its industry peers.
• BABA has a better Current ratio (1.92) than 64.71% of its industry peers.
• BABA has a Quick ratio of 1.92. This is in the better half of the industry: BABA outperforms 76.47% of its industry peers.

Assessing Growth for NYSE:BABA

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:BABA was assigned a score of 7 for growth:

• 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!
• 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.
• BABA is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.65% yearly.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.