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

Zacks Equity Research
Weyerhaeuser (WY) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Alphabet (GOOGL) closed the most recent trading day at $1,044.59, moving -0.94% from the previous trading session. This change lagged the S&P 500's 0.82% gain on the day. At the same time, the Dow added 0.82%, and the tech-heavy Nasdaq gained 0.64%.

Coming into today, shares of the internet search leader had lost 10.55% in the past month. In that same time, the Computer and Technology sector lost 8.68%, while the S&P 500 lost 4.58%.

Investors will be hoping for strength from GOOGL as it approaches its next earnings release. In that report, analysts expect GOOGL to post earnings of $11.48 per share. This would mark a year-over-year decline of 2.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.90 billion, up 17.76% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $45.59 per share and revenue of $130.10 billion, which would represent changes of +4.32% and +18.17%, respectively, from the prior year.

Any recent changes to analyst estimates for GOOGL should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% 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 23.13. For comparison, its industry has an average Forward P/E of 28.26, which means GOOGL is trading at a discount to the group.

It is also worth noting that GOOGL currently has a PEG ratio of 1.32. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 2.88 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 70, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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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