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

Zacks Equity Research
Crown Castle (CCI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

In the latest trading session, Alphabet (GOOGL) closed at $1,231.80, marking a -1.84% move from the previous day. This change lagged the S&P 500's 0.01% gain on the day. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq gained 0.26%.

Prior to today's trading, shares of the internet search leader had gained 1.07% over the past month. This has lagged the Computer and Technology sector's gain of 5.63% and the S&P 500's gain of 3.73% in that time.

GOOGL will be looking to display strength as it nears its next earnings release, which is expected to be October 25, 2018. On that day, GOOGL is projected to report earnings of $10.50 per share, which would represent year-over-year growth of 9.72%. Meanwhile, our latest consensus estimate is calling for revenue of $27.25 billion, up 22.36% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $39.95 per share and revenue of $109.60 billion, which would represent changes of +24.65% and +22.9%, respectively, from the prior year.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.56% lower. GOOGL is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, GOOGL is holding a Forward P/E ratio of 31.4. This represents a discount compared to its industry's average Forward P/E of 34.75.

We can also see that GOOGL currently has a PEG ratio of 1.69. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Services stocks are, on average, holding a PEG ratio of 2.74 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 157, putting it in the bottom 38% 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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