With a market cap of $2 trillion, Alphabet Inc. (GOOG) is a global technology company and the parent of Google. It generates around 90% of its revenue from Google services, including online ads, YouTube subscriptions, and the Play Store, while the rest comes from Google Cloud, hardware sales, and innovative projects like Waymo and Verily. The Mountain View, California-based company is expected to announce its Q3 earnings on Tuesday, Oct. 22.
Ahead of the event, analysts expect the tech giant to report a profit of $1.83 per share, up 18.1% from $1.55 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS projections in the past four quarters. In the most recent quarter, GOOG exceeded the consensus estimates by 2.2%.
In fiscal 2024, analysts expect Alphabet to report an EPS of $7.64, up 31.7% from $5.80 in fiscal 2023. Looking forward to fiscal 2025, its EPS is expected to grow 13.1% year-over-year to $8.64.
GOOG stock is up 17.4% on a YTD basis, underperforming the S&P 500 Index’s ($SPX) 21.9% gains and the Communication Services Select Sector SPDR ETF Fund’s (XLC) 24.8% returns over the same time frame.
Despite strong Q2 earnings results, Alphabet stock sank over 5% on Jul. 24 as investors reacted negatively to the company's forward guidance. While the company beat expectations with earnings of $1.89 per share and revenue of $84.7 billion, concerns arose after management warned that Q3 margins could be pressured due to increased expenses in AI and tech infrastructure. In addition, the stock fell 2.4% on Aug. 14 after reports that the U.S. Department of Justice was considering a full-scale breakup of the company following a ruling that its payments to be the default search engine on devices like Apple's and Samsung's constituted an illegal monopoly.
However, the consensus opinion on Alphabet stock is bullish, with an overall “Strong Buy” rating. Out of the 47 analysts covering the stock, 36 recommend “Strong Buy,” three advise “Moderate Buy,” and eight suggest “Hold.” This configuration is more bullish than three months ago, with 33 analysts suggesting a “Strong Buy.” Currently, GOOG is trading below the average analyst price target of $202.43.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
