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

Zacks Equity Research

Alphabet (GOOGL) closed at $1,190.53 in the latest trading session, marking a -0.31% move from the prior day. This change lagged the S&P 500's 0.06% gain on the day. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq lost 0.13%.

Prior to today's trading, shares of the internet search leader had lost 1.45% over the past month. This has was narrower than the Computer and Technology sector's loss of 4.41% and the S&P 500's loss of 2.95% in that time.

GOOGL will be looking to display strength as it nears its next earnings release. In that report, analysts expect GOOGL to post earnings of $12.55 per share. This would mark a year-over-year decline of 3.91%. Meanwhile, our latest consensus estimate is calling for revenue of $32.79 billion, up 20.73% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $49.94 per share and revenue of $132.41 billion. These totals would mark changes of +14.28% and +20.27%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for GOOGL. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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.

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 0.42% higher. GOOGL is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that GOOGL has a Forward P/E ratio of 23.92 right now. For comparison, its industry has an average Forward P/E of 28.16, which means GOOGL is trading at a discount to the group.

We can also see that GOOGL currently has a PEG ratio of 1.37. 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 industry currently had an average PEG ratio of 2.61 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 159, which puts it in the bottom 38% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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