We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Buy the Dip in Alphabet (GOOGL) Stock as Q1 Earnings Approach?
Read MoreHide Full Article
Outside of Tesla (TSLA - Free Report) , Wall Street will be paying close attention to Alphabet’s (GOOGL - Free Report) quarterly results this week, with the tech behemoth set to release its Q1 report on Thursday, April 24th.
Mounting antitrust pressures have weighed on Alphabet stock as a call to potentially break up Google’s search engine business has led to lower investor sentiment amid broader economic concerns. Furthermore, monopoly concerns regarding Alphabet’s dominance in the online advertising market have extended the selloff, with GOOGL shares down 20% year to date.
That said, Alphabet stock is still sitting on +40% gains over the last two years, making it a worthy topic of if now is a good time to buy the dip.
Image Source: Zacks Investment Research
Alphabet’s Q1 Expectations
Optimistically, Alphabet’s Q1 sales are expected at $75.53 billion, a 12% increase from $67.59 billion in the comparative quarter. On the bottom line, Q1 EPS is expected to be up 6% to $2.01 compared to $1.89 per share a year ago. Alphabet has exceeded the Zacks EPS Consensus for eight consecutive quarters with an average earnings surprise of 11.57% in its last four quarterly reports.
Image Source: Zacks Investment Research
Cheapest P/E Valuation Among the Mag 7
Most appealing about Alphabet stock at the moment is that GOOGL has the cheapest P/E valuation among the "Magnificent 7" big tech stocks. Trading around $150, GOOGL is at a 16.9X forward earnings multiple, a noticeable discount to the benchmark S&P 500’s 19.8X.
Notably, the next cheapest P/E valuation among the Mag 7 is Meta Platforms (META - Free Report) at 19.9X forward earnings, with Tesla's 87X the highest among the group.
Image Source: Zacks Investment Research
GOOGL Price Target & Broker Recommendations
Based on short-term price targets offered by 48 analysts, the Average Zacks Price Target for Alphabet stock is $202.06, which suggests 37% upside from current levels.
Image Source: Zacks Investment Research
Although the average brokerage recommendation (ABR) shouldn’t be confused with the Zack Rank, GOOGL has an ABR of 1.40 on a scale of 1 to 5 (Strong Buy to Strong Sell) which is based on the recommendations of 53 brokerage firms.
Image Source: Zacks Investment Research
Conclusion & Final Thoughts
While the downside risk is starting to look priced in, Alphabet stock currently lands a Zack Rank #3 (Hold). To that point, Alphabet’s EPS outlook is still attractive, but earnings estimate revisions have trended down for fiscal 2025 and FY26.
Considering such, Alphabet’s Q1 report will be critical as a further decline in EPS revisions could lead to a sell rating, but of course, an uptick may lead to a buy rating with GOOGL trading at its cheapest forward P/E valuation in the last decade.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Buy the Dip in Alphabet (GOOGL) Stock as Q1 Earnings Approach?
Outside of Tesla (TSLA - Free Report) , Wall Street will be paying close attention to Alphabet’s (GOOGL - Free Report) quarterly results this week, with the tech behemoth set to release its Q1 report on Thursday, April 24th.
Mounting antitrust pressures have weighed on Alphabet stock as a call to potentially break up Google’s search engine business has led to lower investor sentiment amid broader economic concerns. Furthermore, monopoly concerns regarding Alphabet’s dominance in the online advertising market have extended the selloff, with GOOGL shares down 20% year to date.
That said, Alphabet stock is still sitting on +40% gains over the last two years, making it a worthy topic of if now is a good time to buy the dip.
Image Source: Zacks Investment Research
Alphabet’s Q1 Expectations
Optimistically, Alphabet’s Q1 sales are expected at $75.53 billion, a 12% increase from $67.59 billion in the comparative quarter. On the bottom line, Q1 EPS is expected to be up 6% to $2.01 compared to $1.89 per share a year ago. Alphabet has exceeded the Zacks EPS Consensus for eight consecutive quarters with an average earnings surprise of 11.57% in its last four quarterly reports.
Image Source: Zacks Investment Research
Cheapest P/E Valuation Among the Mag 7
Most appealing about Alphabet stock at the moment is that GOOGL has the cheapest P/E valuation among the "Magnificent 7" big tech stocks. Trading around $150, GOOGL is at a 16.9X forward earnings multiple, a noticeable discount to the benchmark S&P 500’s 19.8X.
Notably, the next cheapest P/E valuation among the Mag 7 is Meta Platforms (META - Free Report) at 19.9X forward earnings, with Tesla's 87X the highest among the group.
Image Source: Zacks Investment Research
GOOGL Price Target & Broker Recommendations
Based on short-term price targets offered by 48 analysts, the Average Zacks Price Target for Alphabet stock is $202.06, which suggests 37% upside from current levels.
Image Source: Zacks Investment Research
Although the average brokerage recommendation (ABR) shouldn’t be confused with the Zack Rank, GOOGL has an ABR of 1.40 on a scale of 1 to 5 (Strong Buy to Strong Sell) which is based on the recommendations of 53 brokerage firms.
Image Source: Zacks Investment Research
Conclusion & Final Thoughts
While the downside risk is starting to look priced in, Alphabet stock currently lands a Zack Rank #3 (Hold). To that point, Alphabet’s EPS outlook is still attractive, but earnings estimate revisions have trended down for fiscal 2025 and FY26.
Considering such, Alphabet’s Q1 report will be critical as a further decline in EPS revisions could lead to a sell rating, but of course, an uptick may lead to a buy rating with GOOGL trading at its cheapest forward P/E valuation in the last decade.