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

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Alphabet (GOOGL - Free Report) closed at $1,208.53 in the latest trading session, marking a -0.1% move from the prior day. This change lagged the S&P 500's 0.36% gain on the day. Elsewhere, the Dow gained 0.73%, while the tech-heavy Nasdaq lost 0.11%.

Coming into today, shares of the internet search leader had lost 3.78% in the past month. In that same time, the Computer and Technology sector lost 0.17%, while the S&P 500 gained 0.73%.

GOOGL will be looking to display strength as it nears its next earnings release, which is expected to be October 25, 2018. The company is expected to report EPS of $10.49, up 9.61% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $27.25 billion, up 22.36% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $39.98 per share and revenue of $109.60 billion, which would represent changes of +24.74% and +22.9%, respectively, from the prior year.

Any recent changes to analyst estimates for GOOGL should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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 0.63% lower within the past month. GOOGL is currently a Zacks Rank #3 (Hold).

Digging into valuation, GOOGL currently has a Forward P/E ratio of 30.19. For comparison, its industry has an average Forward P/E of 33.89, which means GOOGL is trading at a discount to the group.

Meanwhile, GOOGL's PEG ratio is currently 1.63. 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 industry currently had an average PEG ratio of 2.55 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 152, putting it in the bottom 40% 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 Zacks.com.




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