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Alphabet (GOOGL) Gains As Market Dips: What You Should Know

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In the latest trading session, Alphabet (GOOGL - Free Report) closed at $2,045.79, marking a +1.04% move from the previous day. This change outpaced the S&P 500's 0.09% loss on the day. At the same time, the Dow added 0.3%, and the tech-heavy Nasdaq lost 0.6%.

Coming into today, shares of the internet search leader had gained 0.44% in the past month. In that same time, the Computer and Technology sector lost 0.46%, while the S&P 500 gained 4.45%.

Wall Street will be looking for positivity from GOOGL as it approaches its next earnings report date. The company is expected to report EPS of $15.74, up 59.47% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $42.18 billion, up 25.13% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $69.16 per share and revenue of $186.53 billion, which would represent changes of +18% and +24.56%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for GOOGL. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 has moved 0.17% higher. GOOGL currently has a Zacks Rank of #3 (Hold).

In terms of valuation, GOOGL is currently trading at a Forward P/E ratio of 29.28. For comparison, its industry has an average Forward P/E of 29.38, which means GOOGL is trading at a discount to the group.

Also, we should mention that GOOGL has a PEG ratio of 1.65. 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. Internet - Services stocks are, on average, holding a PEG ratio of 1.93 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 146, which puts it in the bottom 43% 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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