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Alphabet (GOOGL) Rises But Trails Market: What Investors Should Know

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The latest trading session saw Alphabet (GOOGL - Free Report) ending at $138.42, denoting a +0.61% adjustment from its last day's close. The stock lagged the S&P 500's daily gain of 0.63%. On the other hand, the Dow registered a gain of 0.59%, and the technology-centric Nasdaq increased by 0.39%.

Shares of the internet search leader witnessed a gain of 0.88% over the previous month, beating the performance of the Computer and Technology sector with its loss of 2.3% and the S&P 500's loss of 3.39%.

Market participants will be closely following the financial results of Alphabet in its upcoming release. The company is predicted to post an EPS of $1.45, indicating a 36.79% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $63.15 billion, up 10.27% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.68 per share and a revenue of $253.64 billion, indicating changes of +24.56% and +8.45%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for Alphabet. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 remained stagnant. Alphabet is currently sporting a Zacks Rank of #3 (Hold).

In the context of valuation, Alphabet is at present trading with a Forward P/E ratio of 24.23. This represents a discount compared to its industry's average Forward P/E of 26.73.

We can additionally observe that GOOGL currently boasts a PEG ratio of 1.58. 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 was holding an average PEG ratio of 1.83 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 61, putting it in the top 25% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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