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Alphabet Inc. (GOOG) Stock Sinks As Market Gains: Here's Why

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In the latest close session, Alphabet Inc. (GOOG - Free Report) was down 1.14% at $244.36. The stock's performance was behind the S&P 500's daily gain of 0.26%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.48%.

The company's shares have seen an increase of 15.76% over the last month, surpassing the Computer and Technology sector's gain of 7.4% and the S&P 500's gain of 2.87%.

Analysts and investors alike will be keeping a close eye on the performance of Alphabet Inc. in its upcoming earnings disclosure. On that day, Alphabet Inc. is projected to report earnings of $2.3 per share, which would represent year-over-year growth of 8.49%. In the meantime, our current consensus estimate forecasts the revenue to be $84.53 billion, indicating a 13.39% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.97 per share and revenue of $334.62 billion. These totals would mark changes of +24% and +13.38%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Alphabet Inc. 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 business outlook.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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 0.25% lower. Alphabet Inc. currently has a Zacks Rank of #3 (Hold).

In the context of valuation, Alphabet Inc. is at present trading with a Forward P/E ratio of 24.8. This denotes a premium relative to the industry average Forward P/E of 24.77.

We can also see that GOOG currently has a PEG ratio of 1.67. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Services was holding an average PEG ratio of 1.67 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 86, this industry ranks in the top 35% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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