Alphabet (GOOGL) Outpaces Stock Market Gains: What You Should Know
In the latest trading session, Alphabet (GOOGL) closed at $1,551.08, marking a +1.38% move from the previous day. This change outpaced the S&P 500's 0.47% gain on the day. At the same time, the Dow added 0.4%, and the tech-heavy Nasdaq gained 0.33%.
Heading into today, shares of the internet search leader had gained 6.98% over the past month, outpacing the Computer and Technology sector's gain of 6.61% and the S&P 500's gain of 3.42% in that time.
Investors will be hoping for strength from GOOGL as it approaches its next earnings release, which is expected to be October 29, 2020. On that day, GOOGL is projected to report earnings of $11.33 per share, which would represent year-over-year growth of 11.96%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $35.26 billion, up 6.81% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $44.92 per share and revenue of $142.57 billion. These totals would mark changes of -8.62% and +8.2%, respectively, from last year.
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.
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.
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 moved 0.49% higher. GOOGL currently has a Zacks Rank of #2 (Buy).
Digging into valuation, GOOGL currently has a Forward P/E ratio of 34.06. For comparison, its industry has an average Forward P/E of 38.64, which means GOOGL is trading at a discount to the group.
It is also worth noting that GOOGL currently has a PEG ratio of 2.09. 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 2.1 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
To follow GOOGL in the coming trading sessions, be sure to utilize Zacks.com.
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