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

Zacks Equity Research

Alphabet (GOOGL) closed at $1,350.63 in the latest trading session, marking a -0.04% move from the prior day. This move lagged the S&P 500's daily gain of 0.09%. At the same time, the Dow added 0.34%, and the tech-heavy Nasdaq gained 0.23%.

Heading into today, shares of the internet search leader had gained 3.93% over the past month, lagging the Computer and Technology sector's gain of 4.31% and outpacing the S&P 500's gain of 3.81% in that time.

Wall Street will be looking for positivity from GOOGL as it approaches its next earnings report date. In that report, analysts expect GOOGL to post earnings of $12.77 per share. This would mark no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $38.44 billion, up 20.73% from the prior-year quarter.

GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $46.59 per share and revenue of $132.71 billion. These results would represent year-over-year changes of +6.61% and +20.54%, respectively.

It is also important to note the recent changes to analyst estimates for GOOGL. Recent revisions tend to reflect the latest near-term business trends. 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. Within the past 30 days, our consensus EPS projection has moved 0.03% lower. GOOGL is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, GOOGL is currently trading at a Forward P/E ratio of 29. Its industry sports an average Forward P/E of 32.37, so we one might conclude that GOOGL is trading at a discount comparatively.

We can also see that GOOGL currently has a PEG ratio of 1.74. 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. The Internet - Services industry currently had an average PEG ratio of 2.84 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 97, putting it in the top 39% 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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