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Alphabet Inc. (GOOG) Dips More Than Broader Markets: What You Should Know

·3-min read

Alphabet Inc. (GOOG) closed at $2,332.45 in the latest trading session, marking a -1.62% move from the prior day. This change lagged the S&P 500's daily loss of 0.3%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, lost 0.1%.

Heading into today, shares of the company had gained 5.09% over the past month, outpacing the Computer and Technology sector's gain of 3.24% and the S&P 500's loss of 0.62% in that time.

Investors will be hoping for strength from Alphabet Inc. as it approaches its next earnings release. On that day, Alphabet Inc. is projected to report earnings of $26.25 per share, which would represent a year-over-year decline of 3.71%. Meanwhile, our latest consensus estimate is calling for revenue of $58.05 billion, up 13.93% from the prior-year quarter.

GOOG's full-year Zacks Consensus Estimates are calling for earnings of $110.83 per share and revenue of $244.17 billion. These results would represent year-over-year changes of -1.22% and +15.14%, respectively.

It is also important to note the recent changes to analyst estimates for Alphabet Inc.These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 1.45% lower. Alphabet Inc. currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Alphabet Inc. is currently trading at a Forward P/E ratio of 21.39. Its industry sports an average Forward P/E of 21.35, so we one might conclude that Alphabet Inc. is trading at a premium comparatively.

Meanwhile, GOOG's PEG ratio is currently 1.16. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services was holding an average PEG ratio of 1.66 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 210, putting it in the bottom 17% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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