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.