Advertisement

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

Alphabet (GOOGL) closed at $2,446.61 in the latest trading session, marking a +0.43% move from the prior day. The stock lagged the S&P 500's daily gain of 0.51%.

Heading into today, shares of the internet search leader had gained 3.19% over the past month, lagging the Computer and Technology sector's gain of 6.2% and outpacing the S&P 500's gain of 1.75% 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 $19.63, up 93.78% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $46.07 billion, up 45.79% from the prior-year quarter.

GOOGL's full-year Zacks Consensus Estimates are calling for earnings of $89.46 per share and revenue of $193.83 billion. These results would represent year-over-year changes of +52.64% and +29.43%, respectively.

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. As a result, we can interpret positive estimate revisions as a good sign for 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.

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 has moved 1.77% higher. GOOGL currently has a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that GOOGL has a Forward P/E ratio of 27.23 right now. For comparison, its industry has an average Forward P/E of 28.71, which means GOOGL is trading at a discount to the group.

Also, we should mention that GOOGL has a PEG ratio of 1.5. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 1.96 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 188, putting it in the bottom 26% 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.