NYSE:BABA is an undervalued gem with solid fundamentals.

Our stock screener has spotted ALIBABA GROUP HOLDING-SP ADR (NYSE:BABA) as an undervalued stock with solid fundamentals. NYSE:BABA shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

What does the Valuation looks like for NYSE:BABA

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:BABA has earned a 7 for valuation:

• BABA is valuated reasonably with a Price/Earnings ratio of 8.42.
• Based on the Price/Earnings ratio, BABA is valued cheaply inside the industry as 84.85% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Earnings ratio of 28.36, BABA is valued rather cheaply.
• Based on the Price/Forward Earnings ratio of 8.57, the valuation of BABA can be described as reasonable.
• BABA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BABA is cheaper than 75.76% of the companies in the same industry.
• BABA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.16.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BABA indicates a rather cheap valuation: BABA is cheaper than 93.94% 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 81.82% of the companies listed in the same industry.
• The decent profitability rating of BABA may justify a higher PE ratio.

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:

• The Return On Assets of BABA (4.52%) is better than 66.67% of its industry peers.
• The Return On Equity of BABA (8.08%) is better than 60.61% of its industry peers.
• With a decent Return On Invested Capital value of 7.39%, BABA is doing good in the industry, outperforming 66.67% of the companies in the same industry.
• The last Return On Invested Capital (7.39%) for BABA is above the 3 year average (6.45%), which is a sign of increasing profitability.
• BABA's Profit Margin of 8.47% is amongst the best of the industry. BABA outperforms 81.82% of its industry peers.
• The Operating Margin of BABA (13.16%) is better than 87.88% of its industry peers.

Health Assessment of 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 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.
• With a decent Debt to FCF ratio value of 1.14, BABA is doing good in the industry, outperforming 69.70% of the companies in the same industry.
• A Debt/Equity ratio of 0.14 indicates that BABA is not too dependend on debt financing.
• Looking at the Debt to Equity ratio, with a value of 0.14, BABA is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
• BABA has a Current ratio of 1.79. This is in the better half of the industry: BABA outperforms 60.61% of its industry peers.
• Looking at the Quick ratio, with a value of 1.79, BABA is in the better half of the industry, outperforming 72.73% of the companies in the same industry.

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 13.82%, which is quite good.
• Measured over the past years, BABA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.09% on average per year.
• The Revenue has grown by 8.34% in the past year. This is quite good.
• Measured over the past years, BABA shows a very strong growth in Revenue. The Revenue has been growing by 20.09% 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

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.