Alphabet (GOOGL) closed the most recent trading day at $314.35, moving +1.48% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.46%. On the other hand, the Dow registered a gain of 0.17%, and the technology-centric Nasdaq increased by 0.57%.
Heading into today, shares of the internet search leader had lost 2.76% over the past month, lagging the Computer and Technology sector's gain of 4.54% and the S&P 500's gain of 4.22%.
Market participants will be closely following the financial results of Alphabet in its upcoming release. On that day, Alphabet is projected to report earnings of $2.59 per share, which would represent year-over-year growth of 20.47%. Simultaneously, our latest consensus estimate expects the revenue to be $94.6 billion, showing a 15.91% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $10.58 per share and a revenue of $340.26 billion, demonstrating changes of +31.59% and +15.3%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Alphabet. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. Alphabet currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Alphabet has a Forward P/E ratio of 29.27 right now. This signifies a premium in comparison to the average Forward P/E of 20.08 for its industry.
One should further note that GOOGL currently holds a PEG ratio of 1.78. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Internet - Services industry had an average PEG ratio of 1.79.
The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 94, positioning it in the top 39% 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.
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Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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