Alphabet (GOOGL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, Alphabet (GOOGL) closed at $1,430.14, marking a -1.44% move from the previous day. This change lagged the S&P 500's daily loss of 1.16%. Meanwhile, the Dow lost 1.84%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Prior to today's trading, shares of the internet search leader had lost 7.94% over the past month. This has lagged the Computer and Technology sector's loss of 2.66% and the S&P 500's loss of 1.96% 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 $11.26 per share. This would mark year-over-year growth of 11.26%. Meanwhile, our latest consensus estimate is calling for revenue of $35.19 billion, up 6.6% from the prior-year quarter.

GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $44.67 per share and revenue of $141.67 billion. These results would represent year-over-year changes of -9.13% and +7.51%, respectively.

Investors should also note any recent changes to analyst estimates for GOOGL. 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.

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 0.16% lower. GOOGL is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that GOOGL has a Forward P/E ratio of 32.49 right now. This represents a discount compared to its industry's average Forward P/E of 38.8.

It is also worth noting that GOOGL currently has a PEG ratio of 1.99. 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. GOOGL's industry had an average PEG ratio of 1.99 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 174, which puts it in the bottom 32% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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