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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 $1,218.33 in the latest trading session, marking a -1.33% move from the prior day. This change lagged the S&P 500's daily loss of 0.84%. Meanwhile, the Dow lost 0.53%, and the Nasdaq, a tech-heavy index, lost 1.47%.

Heading into today, shares of the internet search leader had gained 5.42% over the past month, outpacing the Computer and Technology sector's gain of 5.21% and the S&P 500's gain of 5.2% in that time.

Investors will be hoping for strength from GOOGL as it approaches its next earnings release. The company is expected to report EPS of $12.55, down 3.91% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $32.83 billion, up 20.88% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $49.61 per share and revenue of $132.54 billion. These totals would mark changes of +13.52% and +20.39%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for GOOGL. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.42% higher. GOOGL is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note GOOGL's current valuation metrics, including its Forward P/E ratio of 24.89. Its industry sports an average Forward P/E of 26.15, so we one might conclude that GOOGL is trading at a discount comparatively.

Meanwhile, GOOGL's PEG ratio is currently 1.42. 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. GOOGL's industry had an average PEG ratio of 2.58 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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