We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
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.
Advertising Revenue To Be a Focal Point in Alphabet's Q3
Read MoreHide Full Article
A widely-known mega-cap giant, Alphabet (GOOGL - Free Report) , is slated to unveil quarterly results on October 25th, after the market close.
The company’s advertising results will undoubtedly be a critical metric of the release, as it’s a massive source of the company’s revenue.
By using the quarterly results we’ve already received from Snap (SNAP - Free Report) , we can better understand how the advertising market currently stacks up.
Let’s take a closer look.
Advertising Market Cooling?
Snap reported Q3 earnings of $0.08 per share, beating the breakeven Zacks Consensus EPS Estimate and reflecting a 50% Y/Y decline.
Snap raked in $1.1 billion in revenue throughout the quarter, missing the Zacks Consensus Sales Estimate by roughly 1.5% but reflecting a 6% Y/Y uptick.
However, the digital advertising market has faced a few speedbumps.
In a letter to its shareholders, SNAP says, “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital.”
Clearly, that isn’t good news to hear if you’re Alphabet, which also heavily relies on advertising revenue.
For the quarter, the Zacks Consensus Estimate for Alphabet’s advertising revenue sits at $57.6 billion, suggesting a 2.4% sequential increase and a 12% Y/Y uptick.
In its latest quarter, Alphabet’s advertising revenue came in at $56.2 billion, missing the Zacks Consensus Estimate by a marginal 0.3%, breaking a streak of positive surprises.
Share Performance & Valuation
Alphabet shares have experienced adverse price action YTD, down nearly 30% and underperforming the general market by a wide margin.
Image Source: Zacks Investment Research
Over the past three months, however, GOOGL shares have traded in line with the general market, down just under 5%.
Image Source: Zacks Investment Research
While the year-to-date price action of GOOGL shares leaves much to be desired, the near-term price action indicates that sellers could be losing control.
Following the sell-off in 2022, GOOGL shares have become relatively cheap; the company’s 19.9X forward earnings multiple is well beneath its 26.7X five-year median and reflects a 6% discount relative to its Zacks Computer and Technology sector.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been bearish in their earnings outlook, with two negative earnings estimate revisions coming in over the last several months. The Zacks Consensus EPS Estimate of $1.25 suggests a Y/Y earnings decline of roughly 10%.
Image Source: Zacks Investment Research
However, the company’s top-line is in better health; the Zacks Consensus Sales Estimate of $58.4 billion indicates year-over-year revenue growth of nearly 9%.
Bottom Line
With Snap witnessing a slowdown in advertising, it’s valid to compare the company’s quarterly results to see how it could compare to Alphabet’s upcoming release.
Currently, the Zacks Consensus Estimate for GOOGL’s advertising revenue indicates a sequential and Y/Y uptick, undoubtedly a positive.
Alphabet has struggled to exceed quarterly estimates as of late, falling short of the Zacks Consensus EPS and Sales Estimates in back-to-back quarters.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Advertising Revenue To Be a Focal Point in Alphabet's Q3
A widely-known mega-cap giant, Alphabet (GOOGL - Free Report) , is slated to unveil quarterly results on October 25th, after the market close.
The company’s advertising results will undoubtedly be a critical metric of the release, as it’s a massive source of the company’s revenue.
By using the quarterly results we’ve already received from Snap (SNAP - Free Report) , we can better understand how the advertising market currently stacks up.
Let’s take a closer look.
Advertising Market Cooling?
Snap reported Q3 earnings of $0.08 per share, beating the breakeven Zacks Consensus EPS Estimate and reflecting a 50% Y/Y decline.
Snap raked in $1.1 billion in revenue throughout the quarter, missing the Zacks Consensus Sales Estimate by roughly 1.5% but reflecting a 6% Y/Y uptick.
However, the digital advertising market has faced a few speedbumps.
In a letter to its shareholders, SNAP says, “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital.”
Clearly, that isn’t good news to hear if you’re Alphabet, which also heavily relies on advertising revenue.
For the quarter, the Zacks Consensus Estimate for Alphabet’s advertising revenue sits at $57.6 billion, suggesting a 2.4% sequential increase and a 12% Y/Y uptick.
In its latest quarter, Alphabet’s advertising revenue came in at $56.2 billion, missing the Zacks Consensus Estimate by a marginal 0.3%, breaking a streak of positive surprises.
Share Performance & Valuation
Alphabet shares have experienced adverse price action YTD, down nearly 30% and underperforming the general market by a wide margin.
Image Source: Zacks Investment Research
Over the past three months, however, GOOGL shares have traded in line with the general market, down just under 5%.
Image Source: Zacks Investment Research
While the year-to-date price action of GOOGL shares leaves much to be desired, the near-term price action indicates that sellers could be losing control.
Following the sell-off in 2022, GOOGL shares have become relatively cheap; the company’s 19.9X forward earnings multiple is well beneath its 26.7X five-year median and reflects a 6% discount relative to its Zacks Computer and Technology sector.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been bearish in their earnings outlook, with two negative earnings estimate revisions coming in over the last several months. The Zacks Consensus EPS Estimate of $1.25 suggests a Y/Y earnings decline of roughly 10%.
Image Source: Zacks Investment Research
However, the company’s top-line is in better health; the Zacks Consensus Sales Estimate of $58.4 billion indicates year-over-year revenue growth of nearly 9%.
Bottom Line
With Snap witnessing a slowdown in advertising, it’s valid to compare the company’s quarterly results to see how it could compare to Alphabet’s upcoming release.
Currently, the Zacks Consensus Estimate for GOOGL’s advertising revenue indicates a sequential and Y/Y uptick, undoubtedly a positive.
Alphabet has struggled to exceed quarterly estimates as of late, falling short of the Zacks Consensus EPS and Sales Estimates in back-to-back quarters.