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Alphabet (GOOGL) Gains But Lags Market: What You Should Know

Zacks Equity Research

Alphabet (GOOGL) closed the most recent trading day at $1,484.69, moving +0.04% from the previous trading session. This move lagged the S&P 500's daily gain of 0.11%. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq added 0.2%.

Prior to today's trading, shares of the internet search leader had gained 10.39% over the past month. This has outpaced the Computer and Technology sector's gain of 6.56% and the S&P 500's gain of 3.25% in that time.

Wall Street will be looking for positivity from GOOGL as it approaches its next earnings report date. This is expected to be February 3, 2020. The company is expected to report EPS of $12.76, down 0.08% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $38.44 billion, up 20.73% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for GOOGL. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.24% higher within the past month. GOOGL is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that GOOGL has a Forward P/E ratio of 27.08 right now. For comparison, its industry has an average Forward P/E of 27.72, which means GOOGL is trading at a discount to the group.

Investors should also note that GOOGL has a PEG ratio of 1.62 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.29 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 157, which puts it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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