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Alphabet (GOOGL) Outpaces Stock Market Gains: What You Should Know

Alphabet (GOOGL) closed the most recent trading day at $2,291.44, moving +1.16% from the previous trading session. This change outpaced the S&P 500's 0.36% gain on the day. Elsewhere, the Dow gained 0.23%, while the tech-heavy Nasdaq lost 0.1%.

Prior to today's trading, shares of the internet search leader had lost 3.32% over the past month. This has was narrower than the Computer and Technology sector's loss of 6.98% and the S&P 500's loss of 6.59% in that time.

Wall Street will be looking for positivity from Alphabet as it approaches its next earnings report date. On that day, Alphabet is projected to report earnings of $26.24 per share, which would represent a year-over-year decline of 3.74%. Meanwhile, our latest consensus estimate is calling for revenue of $58.01 billion, up 13.85% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $110.62 per share and revenue of $245.4 billion, which would represent changes of -1.41% and +15.72%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Alphabet. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 1.11% lower. Alphabet currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Alphabet has a Forward P/E ratio of 20.48 right now. Its industry sports an average Forward P/E of 20.54, so we one might conclude that Alphabet is trading at a discount comparatively.

Also, we should mention that GOOGL has a PEG ratio of 1.11. 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 industry currently had an average PEG ratio of 1.74 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 203, putting it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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