Alphabet (GOOGL) outpaces stock market gains: what you need to know – June 20, 2022

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Alphabet (GOOGL Free Report) closed the most recent trading day at $2,142.87, or +1.05% from the previous trading session. The stock topped the S&P 500 daily gain of 0.22%. Meanwhile, the Dow Jones lost 0.13% and the Nasdaq, a technology-heavy index, added 0.22%.

Today, shares of the internet search leader were down 1.62% over the past month. Meanwhile, the IT & Technology sector lost 9.55%, while the S&P 500 lost 10.02%.

Wall Street will be looking for positivity from Alphabet as it nears its next earnings release date. On that day, Alphabet is expected to report earnings of $26.55 per share, which would represent a 2.6% year-over-year decline. Meanwhile, our latest consensus estimate calls for revenue of $58.05 billion, up 13.93% from the prior year quarter.

For the full year, our Zacks consensus estimates call for earnings of $111.86 per share and revenue of $245.69 billion, which would represent swings of -0.3% and +15, 85%, respectively, compared to the previous year.

Investors might also notice recent changes in analyst estimates for Alphabet. Recent revisions tend to reflect the latest short-term trading trends. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business prospects.

Based on our research, we believe that these estimate revisions are directly related to the team’s close stock movements. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes into account these estimation changes and provides a clear and actionable scoring model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive track record of outperformance verified by external audits, with #1 stocks generating an average annual return of +25% since 1988 Zacks Consensus’ EPS estimate fell 0.67% over the past month. Alphabet currently sports a Zacks rank of #3 (Hold).

Investors should also note Alphabet’s current valuation metrics, including its Forward P/E ratio of 19.16. This valuation marks a discount compared to the average Forward P/E of its sector of 19.7.

We can also see that GOOGL currently has a PEG ratio of 1.01. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. Internet – Services held an average PEG ratio of 1.36 at yesterday’s closing price.

The Internet – Services industry is part of the IT and technology sector. This group has a Zacks Industry Rank of 202, which places it in the bottom 21% of all 250+ industries.

The Zacks Industry Rankings are ranked from best to worst in terms of the average Zacks Ranking of individual companies in each of these industries. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

To follow GOOGL in future trading sessions, be sure to use Zacks.com.

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