Alphabet Inc. (GOOG) closed the most recent trading day at $336.41, moving +1.11% from the previous trading session. The stock outperformed the S&P 500, which registered a daily loss of 0.19%. Meanwhile, the Dow lost 0.8%, and the Nasdaq, a tech-heavy index, lost 0.1%.
Prior to today’s trading, shares of the company had gained 7.57% outpaced the Computer and Technology sector’s gain of 2.62% and the S&P 500’s gain of 2.26%.
The investment community will be closely monitoring the performance of Alphabet Inc. in its forthcoming earnings report. The company is predicted to post an EPS of $2.59, indicating a 20.47% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $94.6 billion, reflecting a 15.91% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $10.58 per share and revenue of $340.26 billion, which would represent changes of +31.59% and 0%, respectively, from the prior year.
Any recent changes to analyst estimates for Alphabet Inc. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.23% higher. Alphabet Inc. is currently a Zacks Rank #3 (Hold).
Investors should also note Alphabet Inc.’s current valuation metrics, including its Forward P/E ratio of 30.14. Its industry sports an average Forward P/E of 18.26, so one might conclude that Alphabet Inc. is trading at a premium comparatively.
It’s also important to note that GOOG currently trades at a PEG ratio of 1.84. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. The average PEG ratio for the Internet – Services industry stood at 1.78 at the close of the market yesterday.
