NYSE:BABA stands out as a stock that provides good value for the fundamentals it showcases.

Discover ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA)—an undervalued stock our stock screener has picked out. NYSE:BABA demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

Understanding NYSE:BABA's Valuation

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:

• The Price/Earnings ratio is 8.39, which indicates a very decent valuation of BABA.
• BABA's Price/Earnings ratio is rather cheap when compared to the industry. BABA is cheaper than 90.63% of the companies in the same industry.
• BABA is valuated cheaply when we compare the Price/Earnings ratio to 26.24, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio of 7.46, the valuation of BABA can be described as very cheap.
• Based on the Price/Forward Earnings ratio, BABA is valued cheaper than 84.38% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of BABA to the average of the S&P500 Index (21.49), we can say BABA is valued rather cheaply.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BABA indicates a rather cheap valuation: BABA is cheaper than 93.75% 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 rather cheap valuation: BABA is cheaper than 90.63% 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.
• BABA has a very decent profitability rating, which may justify a higher PE ratio.

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 (7.31%) is better than 81.25% of its industry peers.
• BABA's Return On Equity of 12.79% is fine compared to the rest of the industry. BABA outperforms 62.50% 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.
• Looking at the Profit Margin, with a value of 14.47%, BABA belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
• The Operating Margin of BABA (14.33%) is better than 87.50% of its industry peers.

Assessing Health Metrics 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:

• BABA's Altman-Z score of 2.51 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 Debt to FCF ratio of 0.78. This is in the better half of the industry: BABA outperforms 78.13% of its industry peers.
• A Debt/Equity ratio of 0.15 indicates that BABA is not too dependend on debt financing.
• BABA has a better Current ratio (1.94) than 62.50% of its industry peers.
• BABA has a better Quick ratio (1.94) than 71.88% of its industry peers.

What does the Growth looks like 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 8 for growth:

• 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.
• The Earnings Per Share has been growing by 10.68% on average over the past years. This is quite good.
• 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 very strong growth in Revenue. The Revenue will grow by 59.77% on average per year.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

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.