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What's in the Offing for Alphabet's (GOOGL) Q4 Earnings?
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Alphabet Inc. (GOOGL - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 2. In the last reported quarter, it delivered an earnings surprise of 43.9%.
The stock outperformed the Zacks Consensus Estimate in three out of the trailing four quarters, with the average earnings surprise being 19.8%.
For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $15.90 per share, implying growth of 3.6% from the year-ago reported figure.
The consensus mark for revenues is pegged at $44.09 billion, implying growth of 17.3% from the year-ago reported figure.
Alphabet reported third-quarter 2020 non-GAAP earnings of $16.40 per share, which surpassed the Zacks Consensus Estimate of $11.40. Earnings increased 61.9% sequentially and 62.1% year over year.
Net revenues of $38.01 billion also outpaced the Zacks Consensus Estimate by 7.5%, driven by strength in the company’s search, cloud and YouTube businesses.
Let’s see how things have shaped up for this announcement.
E-commerce, Cloud Momentum & Other Key Catalysts
Markedly, Google has been making strong efforts to reinforce e-commerce presence, as an unprecedented spike in demand has been seen in this sphere buoyed by the COVID-19 pandemic.
Also, the company drove momentum across the advertising business with new features that include booking for services using Local Services ads by Google that are known for connecting customers to trustworthy service providers.
Alphabet’s advertising revenues bounced back in third-quarter 2020, with YouTube advertising revenues up 32.4% year over year to $5 billion, accounting for 10.9% of quarterly revenues.
The trend is expected to have continued in the to-be-reported quarter. Google has seen strong Xmas sales and gains on apps in December. Recovery in travel, recreation and automotive ads is expected to have led to improved digital advertising visibility in the quarter to be reported.
In addition, Google has been significantly gaining momentum in the highly-competitive cloud market over the last few quarters. During the fourth quarter, it expanded the cloud service portfolio and data centers.
In this regard, Google Cloud expanded global footprint with new cloud regions. The expansion is expected to have bolstered Google’s cloud customer base and aided the performance of the cloud division that has become an integral part of the overall business.
Also, during the quarter, the company continued its efforts to boost investment in India. It invested in an India-based social network, ShareChat, expanding its presence in the country.
The latest efforts are expected to have strengthened Google’s key offerings to individual and enterprise customers, thereby expanding top-line growth.
Waymo Efforts
The company’s self-driving project, Waymo, has been steadily gaining momentum in the autonomous vehicle market.
During the quarter, Waymo partnered with Transportation Research Center — the provider of independent vehicle test facility and proving grounds — in a bid to build a new advanced testing environment for Waymo Driver, its autonomous driving technology.
Markedly, the Latent Logic acquisition strengthened Alphabet’s presence in the booming self-driving vehicles market of Europe and U.K. This deal is expected to have helped the company expand user reach in the self-driving space.
These efforts are likely to have driven Alphabet’s top-line growth in the quarter under review.
Concerns
Alphabet’s search advertising business has been facing stiff competition from Amazon. Google Cloud has been trailing both Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) in the cloud computing space. Increasing competition in both the markets might have hurt its top-line growth in the to-be-reported quarter.
In addition, increased spending on consumer gadgets, YouTube video app and cloud computing services is anticipated to have been a risk. Higher expenses are expected to get reflected in the company’s upcoming results.
Also, it faces persistent pressure from advertisers to tighten controls on the YouTube video service. Also, the company’s growing litigation issues and increasing expenses might have hurt profitability.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Alphabet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. And that is the case here.
Earnings ESP: The company has an Earnings ESP of -0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Alphabet has a Zacks Rank #2.
Stock to Consider
Here’s a stock that has the right combination of elements to beat on earnings in the upcoming release.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
What's in the Offing for Alphabet's (GOOGL) Q4 Earnings?
Alphabet Inc. (GOOGL - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 2. In the last reported quarter, it delivered an earnings surprise of 43.9%.
The stock outperformed the Zacks Consensus Estimate in three out of the trailing four quarters, with the average earnings surprise being 19.8%.
For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $15.90 per share, implying growth of 3.6% from the year-ago reported figure.
The consensus mark for revenues is pegged at $44.09 billion, implying growth of 17.3% from the year-ago reported figure.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Performance in the Last Reported Quarter
Alphabet reported third-quarter 2020 non-GAAP earnings of $16.40 per share, which surpassed the Zacks Consensus Estimate of $11.40. Earnings increased 61.9% sequentially and 62.1% year over year.
Net revenues of $38.01 billion also outpaced the Zacks Consensus Estimate by 7.5%, driven by strength in the company’s search, cloud and YouTube businesses.
Let’s see how things have shaped up for this announcement.
E-commerce, Cloud Momentum & Other Key Catalysts
Markedly, Google has been making strong efforts to reinforce e-commerce presence, as an unprecedented spike in demand has been seen in this sphere buoyed by the COVID-19 pandemic.
Also, the company drove momentum across the advertising business with new features that include booking for services using Local Services ads by Google that are known for connecting customers to trustworthy service providers.
Alphabet’s advertising revenues bounced back in third-quarter 2020, with YouTube advertising revenues up 32.4% year over year to $5 billion, accounting for 10.9% of quarterly revenues.
The trend is expected to have continued in the to-be-reported quarter. Google has seen strong Xmas sales and gains on apps in December. Recovery in travel, recreation and automotive ads is expected to have led to improved digital advertising visibility in the quarter to be reported.
In addition, Google has been significantly gaining momentum in the highly-competitive cloud market over the last few quarters. During the fourth quarter, it expanded the cloud service portfolio and data centers.
In this regard, Google Cloud expanded global footprint with new cloud regions. The expansion is expected to have bolstered Google’s cloud customer base and aided the performance of the cloud division that has become an integral part of the overall business.
Also, during the quarter, the company continued its efforts to boost investment in India. It invested in an India-based social network, ShareChat, expanding its presence in the country.
The latest efforts are expected to have strengthened Google’s key offerings to individual and enterprise customers, thereby expanding top-line growth.
Waymo Efforts
The company’s self-driving project, Waymo, has been steadily gaining momentum in the autonomous vehicle market.
During the quarter, Waymo partnered with Transportation Research Center — the provider of independent vehicle test facility and proving grounds — in a bid to build a new advanced testing environment for Waymo Driver, its autonomous driving technology.
Markedly, the Latent Logic acquisition strengthened Alphabet’s presence in the booming self-driving vehicles market of Europe and U.K. This deal is expected to have helped the company expand user reach in the self-driving space.
These efforts are likely to have driven Alphabet’s top-line growth in the quarter under review.
Concerns
Alphabet’s search advertising business has been facing stiff competition from Amazon. Google Cloud has been trailing both Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) in the cloud computing space. Increasing competition in both the markets might have hurt its top-line growth in the to-be-reported quarter.
In addition, increased spending on consumer gadgets, YouTube video app and cloud computing services is anticipated to have been a risk. Higher expenses are expected to get reflected in the company’s upcoming results.
Also, it faces persistent pressure from advertisers to tighten controls on the YouTube video service. Also, the company’s growing litigation issues and increasing expenses might have hurt profitability.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Alphabet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. And that is the case here.
Earnings ESP: The company has an Earnings ESP of -0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Alphabet has a Zacks Rank #2.
Stock to Consider
Here’s a stock that has the right combination of elements to beat on earnings in the upcoming release.
Microchip Technology Incorporated (MCHP - Free Report) has an Earnings ESP of +1.14% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>