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Don't overlook NYSE:BABA—it's a hidden gem with strong fundamentals and an attractive price tag.

By Mill Chart

Last update: Nov 24, 2023

Discover ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA), an undervalued stock highlighted by our stock screener. NYSE:BABA showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Valuation Examination for 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 9 out of 10:

  • Based on the Price/Earnings ratio of 8.97, the valuation of BABA can be described as reasonable.
  • Based on the Price/Earnings ratio, BABA is valued cheaper than 88.24% of the companies in the same industry.
  • When comparing the Price/Earnings ratio of BABA to the average of the S&P500 Index (24.54), we can say BABA is valued rather cheaply.
  • The Price/Forward Earnings ratio is 7.58, which indicates a rather cheap valuation of BABA.
  • 82.35% of the companies in the same industry are more expensive than BABA, based on the Price/Forward Earnings ratio.
  • The average S&P500 Price/Forward Earnings ratio is at 19.58. BABA is valued rather cheaply when compared to this.
  • Based on the Enterprise Value to EBITDA ratio, BABA is valued cheaper than 91.18% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, BABA is valued cheaply inside the industry as 85.29% 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.
  • A more expensive valuation may be justified as BABA's earnings are expected to grow with 15.00% in the coming years.

A Closer Look at Profitability for NYSE:BABA

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:BABA scores a 6 out of 10:

  • BABA has a better Return On Assets (7.31%) than 82.35% of its industry peers.
  • Looking at the Return On Equity, with a value of 12.79%, BABA is in the better half of the industry, outperforming 67.65% of the companies in the same industry.
  • BABA's Return On Invested Capital of 6.34% is fine compared to the rest of the industry. BABA outperforms 64.71% of its industry peers.
  • The last Return On Invested Capital (6.34%) for BABA is above the 3 year average (5.01%), which is a sign of increasing profitability.
  • With an excellent Profit Margin value of 14.47%, BABA belongs to the best of the industry, outperforming 91.18% of the companies in the same industry.
  • BABA has a Operating Margin of 14.33%. This is amongst the best in the industry. BABA outperforms 88.24% of its industry peers.

How We Gauge Health for NYSE:BABA

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:BABA, the assigned 6 reflects its health status:

  • BABA's Altman-Z score of 2.60 is fine compared to the rest of the industry. BABA outperforms 64.71% of its industry peers.
  • 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.
  • The Debt to FCF ratio of BABA (0.78) is better than 79.41% 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.
  • BABA's Debt to Equity ratio of 0.15 is fine compared to the rest of the industry. BABA outperforms 61.76% of its industry peers.
  • Looking at the Current ratio, with a value of 1.94, BABA is in the better half of the industry, outperforming 61.76% of the companies in the same industry.
  • The Quick ratio of BABA (1.94) is better than 73.53% of its industry peers.

How We Gauge Growth 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 6 out of 10:

  • The Earnings Per Share has grown by an impressive 27.18% 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.
  • Measured over the past years, BABA shows a very strong growth in Revenue. The Revenue has been growing by 28.26% on average per year.
  • Based on estimates for the next years, BABA will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.28% on average per year.

More Decent Value stocks can be found in our Decent Value screener.

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

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.

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ALIBABA GROUP HOLDING-SP ADR

NYSE:BABA (2/23/2024, 9:27:56 PM)

After market: 75.87 -0.09 (-0.12%)

75.96

-0.16 (-0.21%)

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