Back to top

Image: Bigstock

Alphabet (GOOGL) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

In the latest trading session, Alphabet (GOOGL - Free Report) closed at $2,811.82, marking a -1.67% move from the previous day. This change lagged the S&P 500's daily loss of 1.26%. At the same time, the Dow lost 0.8%, and the tech-heavy Nasdaq lost 0.44%.

Prior to today's trading, shares of the internet search leader had gained 13.13% over the past month. This has outpaced the Computer and Technology sector's gain of 8.72% and the S&P 500's gain of 6.07% in that time.

Alphabet will be looking to display strength as it nears its next earnings release. On that day, Alphabet is projected to report earnings of $25.53 per share, which would represent a year-over-year decline of 2.89%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $56.01 billion, up 22.83% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $117.32 per share and revenue of $249.89 billion, which would represent changes of +4.56% and +17.83%, respectively, from the prior year.

Any recent changes to analyst estimates for Alphabet should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. 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. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.4% lower. Alphabet is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Alphabet currently has a Forward P/E ratio of 24.37. This valuation marks a premium compared to its industry's average Forward P/E of 23.21.

Meanwhile, GOOGL's PEG ratio is currently 1.23. 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 was holding an average PEG ratio of 2.85 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 29% 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.

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

In-Depth Zacks Research for the Tickers Above

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

Alphabet Inc. (GOOGL) - free report >>

Published in