NYSE:BABA, an undervalued stock with good fundamentals.

Our stock screening tool has pinpointed ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) as an undervalued stock option. NYSE:BABA retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Evaluating Valuation: NYSE:BABA

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:BABA scores a 9 out of 10:

• The Price/Earnings ratio is 8.29, which indicates a very decent valuation of BABA.
• Based on the Price/Earnings ratio, BABA is valued cheaper than 93.75% of the companies in the same industry.
• BABA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.92.
• A Price/Forward Earnings ratio of 7.10 indicates a rather cheap valuation of BABA.
• 84.38% 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 20.82.
• BABA's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. BABA is cheaper than 93.75% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, BABA is valued cheaply inside the industry as 87.50% 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.
• BABA has a very decent profitability rating, which may justify a higher PE ratio.
• BABA's earnings are expected to grow with 13.99% in the coming years. This may justify a more expensive valuation.

Looking at the 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:

• BABA has a better Return On Assets (7.31%) than 81.25% 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 62.50% of the companies in the same industry.
• 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 90.63% of the companies in the same industry.
• BABA's Operating Margin of 14.33% is amongst the best of the industry. BABA outperforms 87.50% of its industry peers.

Health Analysis 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's Altman-Z score of 2.52 is fine compared to the rest of the industry. BABA outperforms 62.50% 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 78.13% 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 has a Current ratio of 1.94. This is in the better half of the industry: BABA outperforms 62.50% of its industry peers.
• With a decent Quick ratio value of 1.94, BABA is doing good in the industry, outperforming 71.88% of the companies in the same industry.

Growth Assessment of NYSE:BABA

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 5 out of 10:

• BABA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.42%, which is quite impressive.
• Measured over the past years, BABA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.68% on average per year.
• 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.

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

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

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.