Alphabet (GOOGL) Stock Sinks As Market Gains: What You Should Know
Alphabet (GOOGL) closed the most recent trading day at $1,516.88, moving -0.26% from the previous trading session. This change lagged the S&P 500's 0.91% gain on the day. Elsewhere, the Dow gained 0.85%, while the tech-heavy Nasdaq added 0.59%.
Coming into today, shares of the internet search leader had gained 5.14% in the past month. In that same time, the Computer and Technology sector gained 8.52%, while the S&P 500 gained 5.26%.
GOOGL will be looking to display strength as it nears its next earnings release, which is expected to be July 30, 2020. On that day, GOOGL is projected to report earnings of $8.23 per share, which would represent a year-over-year decline of 42.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.45 billion, down 3.95% from the year-ago period.
GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $41.57 per share and revenue of $138.29 billion. These results would represent year-over-year changes of -15.44% and +4.95%, respectively.
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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.25% 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 36.58. Its industry sports an average Forward P/E of 34.51, so we one might conclude that GOOGL is trading at a premium comparatively.
We can also see that GOOGL currently has a PEG ratio of 2.27. 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 was holding an average PEG ratio of 2.76 at yesterday's closing price.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 156, putting 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.
To follow GOOGL in the coming trading sessions, be sure to utilize Zacks.com.
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