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How Does Alibaba’s Valuation Stack Up against Its Peers’?

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What’s driving Alibaba’s valuation?

Let’s look at the valuation of Alibaba Group Holdings (BABA) as measured by its PE ratio. We’ll also compare its valuation to those of its peers.

Alibaba last traded at a discount of 18% to its 52-week high. The stock has “strong buy,” “buy,” and “hold” recommendations from 15, 27, and one analyst, respectively. Its higher revenue and EPS expectations have translated to compelling PE ratios. Alibaba has expected PE ratios of 30.2x, 22.6x, and 17.5x, respectively, for the fiscal years ending in March 2019, 2020, and 2021, respectively.

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Peers’ valuations

JD.com (JD) last traded at a 38% discount to its 52-week high. The stock has “strong buy,” “buy,” and “hold” recommendations from six, 16, and 12 analysts, respectively. Its expected PE ratios for the fiscal years ending in December 2018, 2019, and 2020 are 64.7x, 33.3x, and 21.6x, respectively.

Amazon (AMZN) last traded at a 1% discount to its 52-week high. The stock has “strong buy,” “buy,” and “hold” recommendations from 17, 29, and two analysts, respectively. Its expected PE ratios for the fiscal years ending in December 2018, 2019, and 2020 are 109.8x, 75.1x, and 49.9x, respectively.

eBay (EBAY) last traded at a discount of 27% to its 52-week high. The stock has “strong buy,” “buy,” “hold,” and “sell” recommendations from eight, 13, 14, and one analyst, respectively. Its expected PE ratios for the fiscal years ending in December 2018, 2019, and 2020 are 15.1x, 13.4x, and 11.5x, respectively.

Walmart (WMT) last traded at a 14% discount to its 52-week high. The stock has “strong buy,” “buy,” and “hold” recommendations from seven, five, and 19 analysts, respectively. Its expected PE ratios for the fiscal years ending in January 2019, 2020, and 2021 are 19.6x, 19.5x, and 18.5x, respectively.

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