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

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Alphabet (GOOGL - Free Report) closed at $1,081.04 in the latest trading session, marking a -0.16% move from the prior day. This change lagged the S&P 500's daily loss of 0.04%. At the same time, the Dow lost 0.05%, and the tech-heavy Nasdaq lost 0.01%.

Heading into today, shares of the internet search leader had lost 4.74% over the past month, lagging the Computer and Technology sector's loss of 1.99% and the S&P 500's gain of 0.34% in that time.

Wall Street will be looking for positivity from GOOGL as it approaches its next earnings report date. The company is expected to report EPS of $11.48, down 2.3% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.90 billion, up 17.76% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $45.59 per share and revenue of $130.10 billion, which would represent changes of +4.32% and +18.17%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for GOOGL. 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. 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 remained stagnant within the past month. GOOGL is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, GOOGL is holding a Forward P/E ratio of 23.75. This represents a discount compared to its industry's average Forward P/E of 31.13.

It is also worth noting that GOOGL currently has a PEG ratio of 1.36. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 2.9 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 106, putting it in the top 42% 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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