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What is Alibaba PE?

Published in Alibaba PE Ratio 2 mins read

The PE Ratio (Price-to-Earnings Ratio) for Alibaba Group Holding Limited (BABA) as of November 2024 (TTM) is 17.82.

Understanding Alibaba's PE Ratio

The Price-to-Earnings (PE) ratio is a widely used metric that helps investors determine the value of a company's stock. It is calculated by dividing the current share price by its earnings per share (EPS). A higher PE ratio can indicate that investors expect higher earnings growth in the future, while a lower PE ratio might suggest a company is undervalued or has slower growth prospects.

For Alibaba (BABA), the current PE ratio provides a snapshot of how the market values its earnings.

Key PE Ratio Metrics for Alibaba (BABA)

Here's a breakdown of Alibaba's recent PE ratio data:

Metric Value Details
Current PE Ratio (TTM) 17.82 As of November 2024 (Trailing Twelve Months)
Change -50.78% Compared to the average of the last 4 quarters
4-Quarter Average 36.21 Average PE ratio over the last four quarters

This indicates a significant decrease in Alibaba's PE ratio compared to its average over the preceding year, reflecting a substantial shift in market valuation or earnings performance. A decline of over 50% suggests a re-evaluation of the company's growth outlook or profitability by the market.

Why the PE Ratio Matters

  • Valuation Tool: Investors use the PE ratio to assess if a stock is overvalued or undervalued relative to its earnings.
  • Industry Comparison: It allows for comparison with competitors and industry averages to gauge relative attractiveness.
  • Growth Expectations: A higher PE often implies greater future growth expectations from investors, while a lower PE might suggest more conservative growth outlooks.

Analyzing the PE ratio in conjunction with other financial metrics and market conditions provides a more comprehensive view of Alibaba's financial health and investment potential.