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Alphabet (GOOGL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, Alphabet (GOOGL) closed at $1,414.30, marking a -1.73% move from the previous day. This change lagged the S&P 500's daily loss of 0.34%. Elsewhere, the Dow gained 0.05%, while the tech-heavy Nasdaq lost 0.69%.

GOOGL will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $8.55, down 39.83% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $30.38 billion, down 4.19% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $41.47 per share and revenue of $137.88 billion, which would represent changes of -15.64% and +4.64%, respectively, from the prior year.

Any recent changes to analyst estimates for GOOGL should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. GOOGL is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note GOOGL's current valuation metrics, including its Forward P/E ratio of 34.71. This represents a premium compared to its industry's average Forward P/E of 31.82.

It is also worth noting that GOOGL currently has a PEG ratio of 2.16. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 2.65 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 42, putting it in the top 17% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research