NYSE:BABA is probably undervalued for the fundamentals it is displaying.

Last update: Jun 7, 2024

ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) was identified as a decent value stock by our stock screener. NYSE:BABA scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Valuation Assessment of NYSE:BABA

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:BABA has achieved a 7 out of 10:

BABA is valuated reasonably with a Price/Earnings ratio of 9.34.
84.38% 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 28.21.
BABA is valuated reasonably with a Price/Forward Earnings ratio of 9.49.
Based on the Price/Forward Earnings ratio, BABA is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.07. BABA is valued rather cheaply when compared to this.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BABA indicates a rather cheap valuation: BABA is cheaper than 90.63% 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 81.25% of the companies listed in the same industry.
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 4.52%. This is in the better half of the industry: BABA outperforms 65.63% of its industry peers.
BABA has a better Return On Invested Capital (7.39%) than 65.63% of its industry peers.
The 3 year average ROIC (6.45%) for BABA is below the current ROIC(7.39%), indicating increased profibility in the last year.
BABA's Profit Margin of 8.47% is amongst the best of the industry. BABA outperforms 81.25% of its industry peers.
The Operating Margin of BABA (13.16%) is better than 87.50% of its industry peers.

Exploring NYSE:BABA's Health

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:BABA has achieved a 5 out of 10:

The Debt to FCF ratio of BABA is 1.14, which is an excellent value as it means it would take BABA, only 1.14 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of BABA (1.14) is better than 68.75% of its industry peers.
A Debt/Equity ratio of 0.14 indicates that BABA is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.14, BABA is doing good in the industry, outperforming 65.63% of the companies in the same industry.
The Quick ratio of BABA (1.79) is better than 71.88% of its industry peers.

Exploring NYSE:BABA's Growth

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:

The Earnings Per Share has grown by an nice 13.82% 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 10.09% yearly.
The Revenue has grown by 8.34% in the past year. This is quite good.
The Revenue has been growing by 20.09% on average over the past years. This is a very strong growth!

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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

Disclaimer

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.