NYSE:BABA: a strong growth stock preparing for the next leg up?.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but ALIBABA GROUP HOLDING-SP ADR has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

A Closer Look at Growth for 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 8 out of 10:

• The Earnings Per Share has grown by an impressive 27.42% 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.
• BABA is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 59.85% yearly.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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 2.53 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.
• Looking at the Debt to FCF ratio, with a value of 0.78, BABA is in the better half of the industry, outperforming 78.13% 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's Current ratio of 1.94 is fine compared to the rest of the industry. BABA outperforms 62.50% of its industry peers.
• BABA has a better Quick ratio (1.94) than 71.88% of its industry peers.

Profitability Analysis for NYSE:BABA

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:BABA has earned a 6 out of 10:

• Looking at the Return On Assets, with a value of 7.31%, BABA belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
• The 3 year average ROIC (5.01%) for BABA is below the current ROIC(6.34%), indicating increased profibility in the last year.
• 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.

How do we evaluate the setup for NYSE:BABA?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:BABA currently has a 7 as setup rating:

BABA has a bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 74.64. Right above this resistance zone may be a good entry point. Another positive sign is the recent Pocket Pivot signal.

More Strong Growth stocks can be found in our Strong Growth screener.

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

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

Keep in mind

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.