Back to top

Image: Bigstock

Alphabet Inc. (GOOG) Beats Stock Market Upswing: What Investors Need to Know

Read MoreHide Full Article

Alphabet Inc. (GOOG - Free Report) closed at $255.24 in the latest trading session, marking a +1.15% move from the prior day. This change outpaced the S&P 500's 0.49% gain on the day. Elsewhere, the Dow saw an upswing of 0.38%, while the tech-heavy Nasdaq appreciated by 0.72%.

Shares of the company witnessed a gain of 25.77% over the previous month, beating the performance of the Computer and Technology sector with its gain of 6.81%, and the S&P 500's gain of 2.99%.

The investment community will be closely monitoring the performance of Alphabet Inc. in its forthcoming earnings report. The company is predicted to post an EPS of $2.32, indicating a 9.43% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $84.53 billion, up 13.39% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.98 per share and revenue of $334.62 billion. These totals would mark changes of +24.13% and +13.38%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Alphabet Inc. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.14% lower. At present, Alphabet Inc. boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Alphabet Inc. is currently trading at a Forward P/E ratio of 25.29. Its industry sports an average Forward P/E of 25.26, so one might conclude that Alphabet Inc. is trading at a premium comparatively.

We can additionally observe that GOOG currently boasts a PEG ratio of 1.7. 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. The Internet - Services industry currently had an average PEG ratio of 1.7 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 40% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Alphabet Inc. (GOOG) - free report >>

Published in