NYSE:BABA appears to be flying under the radar despite its strong fundamentals.

Uncover the hidden value in ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) as our stock screening tool recommends it as an undervalued choice. NYSE:BABA maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

How do we evaluate the Valuation for 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 8 out of 10:

• The Price/Earnings ratio is 10.12, which indicates a very decent valuation of BABA.
• Compared to the rest of the industry, the Price/Earnings ratio of BABA indicates a rather cheap valuation: BABA is cheaper than 82.35% of the companies listed in the same industry.
• BABA is valuated cheaply when we compare the Price/Earnings ratio to 23.73, which is the current average of the S&P500 Index.
• The Price/Forward Earnings ratio is 8.20, which indicates a very decent valuation of BABA.
• Based on the Price/Forward Earnings ratio, BABA is valued cheaply inside the industry as 82.35% of the companies are valued more expensively.
• BABA is valuated cheaply when we compare the Price/Forward Earnings ratio to 18.67, which is the current average of the S&P500 Index.
• Based on the Enterprise Value to EBITDA ratio, BABA is valued cheaper than 88.24% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, BABA is valued a bit cheaper than 79.41% of the companies in the same industry.
• The 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.

Profitability Assessment of NYSE:BABA

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 (4.73%) than 79.41% of its industry peers.
• Looking at the Return On Equity, with a value of 8.22%, BABA is in the better half of the industry, outperforming 67.65% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 6.04%, BABA is in the better half of the industry, outperforming 64.71% of the companies in the same industry.
• The 3 year average ROIC (5.01%) for BABA is below the current ROIC(6.04%), indicating increased profibility in the last year.
• The Profit Margin of BABA (9.37%) is better than 88.24% of its industry peers.
• The Operating Margin of BABA (13.67%) is better than 85.29% of its industry peers.

Assessing Health Metrics for NYSE:BABA

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, 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 2.70 is fine compared to the rest of the industry. BABA outperforms 64.71% 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 79.41% of the companies in the same industry.
• A Debt/Equity ratio of 0.15 indicates that BABA is not too dependend on debt financing.
• Looking at the Current ratio, with a value of 1.92, BABA is in the better half of the industry, outperforming 61.76% of the companies in the same industry.
• BABA's Quick ratio of 1.92 is fine compared to the rest of the industry. BABA outperforms 73.53% of its industry peers.

Evaluating Growth: 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:

• BABA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.33%, 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.
• The Revenue has been growing by 28.26% on average over the past years. This is a very strong growth!
• BABA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.28% yearly.

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

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

Disclaimer

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.