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

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In the latest trading session, Alphabet (GOOGL - Free Report) closed at $1,111.67, marking a +1.88% move from the previous day. This move outpaced the S&P 500's daily gain of 0.47%. At the same time, the Dow added 0.95%, and the tech-heavy Nasdaq gained 2.3%.

Prior to today's trading, shares of the internet search leader had lost 28.44% over the past month. This has lagged the Computer and Technology sector's loss of 28.18% and was narrower than the S&P 500's loss of 28.7% in that time.

Wall Street will be looking for positivity from GOOGL as it approaches its next earnings report date. In that report, analysts expect GOOGL to post earnings of $12.13 per share. This would mark year-over-year growth of 1.93%. Meanwhile, our latest consensus estimate is calling for revenue of $34.80 billion, up 18.05% from the prior-year quarter.

GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $53.97 per share and revenue of $153.82 billion. These results would represent year-over-year changes of +9.78% and +16.74%, respectively.

It is also important to note the recent changes to analyst estimates for GOOGL. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

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 1.28% lower. GOOGL currently has a Zacks Rank of #3 (Hold).

In terms of valuation, GOOGL is currently trading at a Forward P/E ratio of 20.22. Its industry sports an average Forward P/E of 22.57, so we one might conclude that GOOGL is trading at a discount comparatively.

It is also worth noting that GOOGL currently has a PEG ratio of 1.23. 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. GOOGL's industry had an average PEG ratio of 1.6 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 90, putting it in the top 36% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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