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Alphabet (GOOGL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Alphabet (GOOGL) closed at $1,482.83, marking a +1.87% move from the previous day. This change outpaced the S&P 500's 1.8% gain on the day. Elsewhere, the Dow gained 1.68%, while the tech-heavy Nasdaq added 2.33%.

Coming into today, shares of the internet search leader had lost 10.67% in the past month. In that same time, the Computer and Technology sector lost 9.14%, while the S&P 500 lost 6.31%.

Investors will be hoping for strength from GOOGL as it approaches its next earnings release. On that day, GOOGL is projected to report earnings of $11.35 per share, which would represent year-over-year growth of 12.15%. Meanwhile, our latest consensus estimate is calling for revenue of $35.19 billion, up 6.6% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $44.84 per share and revenue of $142.21 billion, which would represent changes of -8.79% and +7.93%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for GOOGL. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.23% higher. GOOGL currently has a Zacks Rank of #2 (Buy).

Investors should also note GOOGL's current valuation metrics, including its Forward P/E ratio of 32.46. For comparison, its industry has an average Forward P/E of 37.35, which means GOOGL is trading at a discount to the group.

It is also worth noting that GOOGL currently has a PEG ratio of 1.99. 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 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 180, putting it in the bottom 29% 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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