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Alphabet (GOOGL) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

Alphabet (GOOGL) closed at $1,567.07 in the latest trading session, marking a +0.16% move from the prior day. This change outpaced the S&P 500's 0.63% loss on the day. Elsewhere, the Dow lost 0.55%, while the tech-heavy Nasdaq lost 0.1%.

Heading into today, shares of the internet search leader had gained 3.7% over the past month, lagging the Computer and Technology sector's gain of 8.45% and the S&P 500's gain of 5.91% 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 October 26, 2020. The company is expected to report EPS of $11.37, up 12.35% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $35.22 billion, up 6.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $44.84 per share and revenue of $142.35 billion. These totals would mark changes of -8.79% and +8.03%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for GOOGL. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.24% higher. 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 34.89. This valuation marks a discount compared to its industry's average Forward P/E of 38.64.

Investors should also note that GOOGL has a PEG ratio of 2.14 right now. 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. GOOGL's industry had an average PEG ratio of 2.15 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 195, putting it in the bottom 23% 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.

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


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