NYSE:BABA, an undervalued stock with good fundamentals.

Last update: Feb 20, 2024

Uncover the potential of ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) as our stock screener's choice for an undervalued stock. NYSE:BABA maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Evaluating Valuation: NYSE:BABA

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:BABA was assigned a score of 9 for valuation:

With a Price/Earnings ratio of 8.46, the valuation of BABA can be described as very reasonable.
90.91% of the companies in the same industry are more expensive than BABA, based on the Price/Earnings ratio.
BABA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.18.
The Price/Forward Earnings ratio is 7.51, which indicates a rather cheap valuation of BABA.
BABA's Price/Forward Earnings ratio is rather cheap when compared to the industry. BABA is cheaper than 84.85% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.51, BABA is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, BABA is valued cheaply inside the industry as 93.94% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, BABA is valued cheaper than 84.85% of the companies 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.

Assessing Profitability for NYSE:BABA

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:BABA was assigned a score of 6 for profitability:

BABA has a Return On Assets of 5.49%. This is in the better half of the industry: BABA outperforms 69.70% of its industry peers.
The last Return On Invested Capital (6.23%) for BABA is above the 3 year average (5.01%), which is a sign of increasing profitability.
BABA has a Profit Margin of 10.78%. This is amongst the best in the industry. BABA outperforms 84.85% of its industry peers.
The Operating Margin of BABA (13.41%) is better than 81.82% of its industry peers.

What does the Health looks like 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 5 out of 10:

The Debt to FCF ratio of BABA is 0.98, which is an excellent value as it means it would take BABA, only 0.98 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 0.98, BABA is doing good in the industry, outperforming 75.76% of the companies in the same industry.
BABA has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
BABA has a Debt to Equity ratio of 0.14. This is in the better half of the industry: BABA outperforms 60.61% of its industry peers.
The Quick ratio of BABA (1.80) is better than 66.67% of its industry peers.

Assessing Growth Metrics for NYSE:BABA

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:BABA, the assigned 5 reflects its growth potential:

BABA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.44%, 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.