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

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In the latest trading session, Alphabet (GOOGL - Free Report) closed at $1,446.47, marking a +1.81% move from the previous day. This change lagged the S&P 500's 1.9% gain on the day. Meanwhile, the Dow gained 2.05%, and the Nasdaq, a tech-heavy index, added 1.75%.

GOOGL will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $8.24, down 42.01% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $30.38 billion, down 4.19% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $41.47 per share and revenue of $137.88 billion. These totals would mark changes of -15.64% and +4.64%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for GOOGL. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. 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 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. GOOGL is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, GOOGL is holding a Forward P/E ratio of 34.26. This represents a premium compared to its industry's average Forward P/E of 32.98.

Also, we should mention that GOOGL has a PEG ratio of 2.13. 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 2.57 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% 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.

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


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