Alphabet Inc. (GOOG) Outpaces Stock Market Gains: What You Should Know

Alphabet Inc. (GOOG) closed the most recent trading day at $2,157.31, moving +1.15% from the previous trading session. This move outpaced the S&P 500’s daily gain of 0.22%. Meanwhile, the Dow lost 0.13%, and the Nasdaq, a tech-heavy index, added 0.22%.

Coming into today, shares of the company had lost 1.32% in the past month. In that same time, the Computer and Technology sector lost 9.55%, while the S&P 500 lost 10.02%.

Alphabet Inc. will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $26.55, down 2.6% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $58.05 billion, up 13.93% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $111.86 per share and revenue of $244.17 billion. These totals would mark changes of -0.3% and +15.14%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Alphabet Inc.These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.67% lower. Alphabet Inc. is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Alphabet Inc. is currently trading at a Forward P/E ratio of 19.28. This represents a discount compared to its industry’s average Forward P/E of 19.7.

Also, we should mention that GOOG has a PEG ratio of 1.01. 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. Internet – Services stocks are, on average, holding a PEG ratio of 1.36 based on yesterday’s closing prices.

The Internet – Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 202, putting it in the bottom 21% 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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