Alphabet (GOOGL) ended the recent trading session at $347.33, demonstrating a +1.3% change from the preceding day’s closing price. This move outpaced the S&P 500’s daily gain of 1.14%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, added 1.69%.
Heading into today, shares of the internet search leader had lost 0.54% over the past month, outpacing the Computer and Technology sector’s loss of 1.69% and the S&P 500’s loss of 2.85%.
Market participants will be closely following the financial results of Alphabet in its upcoming release. The company is predicted to post an EPS of $2.93, indicating a 2.09% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $111.26 billion, indicating a 27.2% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $20.51 per share and revenue of $433.58 billion, indicating changes of +89.73% and +26.44%, respectively, compared to the previous year.
Any recent changes to analyst estimates for Alphabet should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.02% downward. Alphabet currently has a Zacks Rank of #3 (Hold).
With respect to valuation, Alphabet is currently being traded at a Forward P/E ratio of 16.81. This valuation marks a premium compared to its industry average Forward P/E of 15.73.
One should further note that GOOGL currently holds a PEG ratio of 1. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. By the end of yesterday’s trading, the Internet – Services industry had an average PEG ratio of 1.52.
The Internet – Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 184, this industry ranks in the bottom 26% of all industries, numbering over 250.
