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Alphabet Inc. (GOOG) Laps the Stock Market: Here's Why

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Alphabet Inc. (GOOG - Free Report) closed the latest trading day at $199.63, indicating a +1.05% change from the previous session's end. This move outpaced the S&P 500's daily gain of 0.88%. Meanwhile, the Dow experienced a rise of 1.24%, and the technology-dominated Nasdaq saw an increase of 0.65%.

Shares of the company witnessed a gain of 0.8% over the previous month, beating the performance of the Computer and Technology sector with its gain of 0.37% and underperforming the S&P 500's gain of 1.17%.

Analysts and investors alike will be keeping a close eye on the performance of Alphabet Inc. in its upcoming earnings disclosure. The company's earnings report is set to go public on February 4, 2025. The company's earnings per share (EPS) are projected to be $2.12, reflecting a 29.27% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $81.42 billion, up 12.57% from the year-ago period.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Alphabet Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.12% rise in the Zacks Consensus EPS estimate. Alphabet Inc. presently features a Zacks Rank of #3 (Hold).

Investors should also note Alphabet Inc.'s current valuation metrics, including its Forward P/E ratio of 22.12. For comparison, its industry has an average Forward P/E of 22.25, which means Alphabet Inc. is trading at a discount to the group.

One should further note that GOOG currently holds a PEG ratio of 1.25. 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. As of the close of trade yesterday, the Internet - Services industry held an average PEG ratio of 1.56.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 89, putting it in the top 36% 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.

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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