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Alphabet Inc. (GOOG) Gains But Lags Market: What You Should Know

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In the latest trading session, Alphabet Inc. (GOOG - Free Report) closed at $2,692.01, marking a +0.68% move from the previous day. The stock lagged the S&P 500's daily gain of 1.24%. At the same time, the Dow added 1.23%, and the tech-heavy Nasdaq gained 0.15%.

Heading into today, shares of the company had lost 2.76% over the past month, outpacing the Computer and Technology sector's loss of 5.9% and lagging the S&P 500's loss of 2.45% in that time.

Wall Street will be looking for positivity from Alphabet Inc. as it approaches its next earnings report date. On that day, Alphabet Inc. is projected to report earnings of $25.64 per share, which would represent a year-over-year decline of 2.47%. Our most recent consensus estimate is calling for quarterly revenue of $55.83 billion, up 22.43% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $117.70 per share and revenue of $249.61 billion. These totals would mark changes of +4.9% and +17.7%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Alphabet Inc.These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.08% lower within the past month. Alphabet Inc. currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Alphabet Inc. has a Forward P/E ratio of 22.72 right now. For comparison, its industry has an average Forward P/E of 22.75, which means Alphabet Inc. is trading at a discount to the group.

We can also see that GOOG currently has a PEG ratio of 1.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.36 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 209, which puts it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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