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Alphabet Inc. (GOOG) Gains But Lags Market: What You Should Know

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Zacks Equity Research
·3 min read
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Alphabet Inc. (GOOG) closed at $2,297.76 in the latest trading session, marking a +0.05% move from the prior day. This move lagged the S&P 500's daily gain of 0.36%.

Prior to today's trading, shares of the company had gained 7.83% over the past month. This has lagged the Computer and Technology sector's gain of 9.06% and outpaced the S&P 500's gain of 5.21% in that time.

Investors will be hoping for strength from GOOG as it approaches its next earnings release, which is expected to be April 27, 2021. The company is expected to report EPS of $15.41, up 56.13% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $42.23 billion, up 25.28% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $68.72 per share and revenue of $186.6 billion, which would represent changes of +17.25% and +24.61%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for GOOG. These revisions help to show the ever-changing nature of near-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. 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 0.47% lower. GOOG is currently a Zacks Rank #3 (Hold).

Digging into valuation, GOOG currently has a Forward P/E ratio of 32.73. For comparison, its industry has an average Forward P/E of 31.92, which means GOOG is trading at a premium to the group.

Also, we should mention that GOOG has a PEG ratio of 1.84. 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. GOOG's industry had an average PEG ratio of 1.84 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 179, which puts it in the bottom 30% 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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