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Alphabet (GOOGL) Gains But Lags Market: What You Should Know

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Alphabet (GOOGL - Free Report) closed at $1,116.36 in the latest trading session, marking a +0.6% move from the prior day. This change lagged the S&P 500's 1.09% gain on the day. Meanwhile, the Dow gained 1.13%, and the Nasdaq, a tech-heavy index, added 1.51%.

Heading into today, shares of the internet search leader had gained 2.18% over the past month, outpacing the Computer and Technology sector's loss of 0.28% and the S&P 500's gain of 1.92% in that time.

Wall Street will be looking for positivity from GOOGL as it approaches its next earnings report date. This is expected to be February 7, 2019. The company is expected to report EPS of $11.01, up 13.51% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $31.26 billion, up 20.83% from the prior-year quarter.

GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $42.01 per share and revenue of $109.51 billion. These results would represent year-over-year changes of +31.08% and +22.79%, respectively.

Investors should also note any 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. GOOGL is currently a Zacks Rank #3 (Hold).

Digging into valuation, GOOGL currently has a Forward P/E ratio of 26.42. For comparison, its industry has an average Forward P/E of 29.13, which means GOOGL is trading at a discount to the group.

It is also worth noting that GOOGL currently has a PEG ratio of 1.46. 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. Internet - Services stocks are, on average, holding a PEG ratio of 2.21 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 74, putting it in the top 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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