Alphabet (GOOGL) Gains As Market Dips: What You Should Know

Zacks Equity Research

In the latest trading session, Alphabet (GOOGL) closed at $1,161.95, marking a +1.36% move from the previous day. This move outpaced the S&P 500's daily loss of 1.6%. Elsewhere, the Dow lost 1.84%, while the tech-heavy Nasdaq lost 0.95%.

Coming into today, shares of the internet search leader had lost 17.31% in the past month. In that same time, the Computer and Technology sector lost 9.68%, while the S&P 500 lost 10.82%.

GOOGL will be looking to display strength as it nears its next earnings release. In that report, analysts expect GOOGL to post earnings of $12.86 per share. This would mark year-over-year growth of 8.07%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $33.97 billion, up 15.23% from the year-ago period.

GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $50.59 per share and revenue of $147.93 billion. These results would represent year-over-year changes of +2.91% and +12.26%, respectively.

Any recent changes to analyst estimates for GOOGL should also be noted by investors. 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.

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.

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. The Zacks Consensus EPS estimate has moved 7.25% lower within the past month. GOOGL is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that GOOGL has a Forward P/E ratio of 22.66 right now. This valuation marks a discount compared to its industry's average Forward P/E of 25.5.

It is also worth noting that GOOGL currently has a PEG ratio of 1.43. 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. The Internet - Services was holding an average PEG ratio of 1.93 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 43, putting it in the top 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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