Factors in Alibaba Group Holding Ltd’s (NYSE:BABA) current Strong Buy recommendation are analytical scores that are near average, a ranking in the company’s sector group that is in the top decile, a ranking in its industry group that is in the top quarter, and a quantitative risk/reward calculation that is very attractive. As a member of an industry group that is ranked above average in investment attractiveness is a plus from a recommendation perspective; however, its sector is ranked below average in attractiveness which may counterbalance this to a degree. Portfolio Grader currently ranks BABA as a Strong Buy. This analytical tool assesses stocks with fundamental and quantitative algorithmic. BABA has maintained this ranking for 9 months.
BABA ranks in the top quarter of its industry group, Internet Retail, and in the top decile of sector group, Retail Trade, with a market value of $478.7 billion.
Currently, Portfolio Grader ranks the Retail Trade sector number 15 among the 20 sectors in its universe putting it in the bottom quartile of all the GICS sectors. The Internet Retail industry group is ranked 54 among the 129 industry groups within the GICS sectors, placing it near the average in terms of the Proprietary Quantitative Score scoring system.
BABA has attained well above-average scores in 4, and above-average scores in 1 of the 8 fundamental areas appraised by Portfolio Grader in the ranking of company stocks.
The company’s operational scores are a source of strength with a ranking for sales growth, operating margin and earnings growth that are well above average. Scores for visibility of earnings are mixed, with a ranking for earnings surprises and earnings momentum that are worse than average, while the score for earnings revisions is better than average. BABA’s ranking for return on equity is strikingly better than its industry group average but its grade for cash flow is below-average. Alibaba Group Holding’s fundamental scores give BABA a place in the top quartile of the industry group.
Portfolio Grader quantitatively measures BABA’s shares using the Proprietary Quantitative Score. This metric looks at BABA’s shares from the angle of risk/reward. This unique scoring approach balances the relative value of the company’s shares based on the recent $187.31 share price of the shares relative to its peers, the market and risk associated with its industry and sector groups. Using this risk/reward calculation, BABA currently scores well above-average in its industry group compared to its peers.
The Proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results, with A being ‘strong buy’ and F being ‘strong sell’. Explore the tool here.
Commentary provided by UpTick Data Technologies.