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Alphabet (GOOGL) Gains But Lags Market: What You Should Know

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Alphabet (GOOGL - Free Report) closed at $1,547.23 in the latest trading session, marking a +1.55% move from the prior day. This change lagged the S&P 500's 2.02% gain on the day. At the same time, the Dow added 1.6%, and the tech-heavy Nasdaq gained 2.71%.

Heading into today, shares of the internet search leader had gained 2.91% over the past month, outpacing the Computer and Technology sector's loss of 0.91% and the S&P 500's loss of 0.39% in that time.

GOOGL will be looking to display strength as it nears its next earnings release. In that report, analysts expect GOOGL to post earnings of $11.27 per share. This would mark year-over-year growth of 11.36%. Meanwhile, our latest consensus estimate is calling for revenue of $35.22 billion, up 6.69% from the prior-year quarter.

GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $44.74 per share and revenue of $141.66 billion. These results would represent year-over-year changes of -8.99% and +7.51%, respectively.

It is also important to note the recent changes to analyst estimates for GOOGL. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. GOOGL is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that GOOGL has a Forward P/E ratio of 34.06 right now. This valuation marks a discount compared to its industry's average Forward P/E of 37.74.

Investors should also note that GOOGL has a PEG ratio of 2.09 right now. 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 industry currently had an average PEG ratio of 2.11 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 125, putting it in the top 50% 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.

To follow GOOGL in the coming trading sessions, be sure to utilize Zacks.com.


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