Google (GOOGL) EPS Cheat Sheet

In This Article:

Google Earnings are Due

Google parent and Zacks Rank #2 (Buy) stock Alphabet (GOOGL) will report third-quarter earnings Tuesday, October 29th after the market closes. Below are the things you need to know about the upcoming report:

Wall Street Expectations

Zacks Investment Research accumulates data from hundreds of Wall Street firms devlop its consensus estimates. Wall Street analysts tracked by Zacks expect Google to earn $1.83 for the third quarter, which represents 18.06% year-over-year growth, on $72.85 billion in sales (13.73% YoY growth).

Zacks Investment Research
Zacks Investment Research


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Implied Options Move

The options market can hint at a stock’s potential price move the day after earnings. Currently, the options market implies a move of plus or minus ~6%.

Post-EPS Price Reaction History

Google has been down the session after earnings in 3 of the past 5 quarters. Returns were as follows:

·       -5.04%

·       +10.22%

·       -7.50%

·       -9.51%

·       +5.78%

EPS Surprise History

Alphabet has surpassed Zacks Consensus Estimates in 14 of the past 20 quarters.

Zacks Investment Research
Zacks Investment Research


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Over the past four quarters Google has surpassed Zacks Consensus Estimates by 9.60% on average.

Zacks Investment Research
Zacks Investment Research


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Historical Valuation & Valuation vs. Peers

Google’s valuation is cheap on a historical basis. The stock trades at a relatively cheap price-to-earnings multiple of 23.71x. GOOGL’s P/E has ranged from ~17x to ~37x in that timeframe.

Zacks Investment Research
Zacks Investment Research


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Meanwhile, Google is the cheapest name out of the “Magnificent 7” names which include Microsoft (MSFT), Amazon (AMZN), Apple (AAPL), Nvidia (NVDA), Tesla (TSLA), and Meta Platforms (META).

Technical Levels & Information

GOOGL key levels to watch:

·       Shares are coiling above their 200-day moving average which is ~3.4% lower ($161.29).

·       Google’s swing low is $147.22.

·       Short-term resistance sits at $169.16.

·       There’s an open daily price gap at $183.61, and all-time highs are at $191.75.

Note: The coiled nature of shares suggests that GOOGL may move more implied move of the options, as price contraction leads to price expansion.

Zacks Investment Research
Zacks Investment Research


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3 Potential Catalysts

Below are 3 things to watch for during the earnings call:

1.       Cloud: Google’s Cloud business is a key driver for the company. Despite the highly competitive cloud market Google generated cloud revenues of more than $10 billion in Q2 and accounted for ~12% of total revenues. Google Cloud revenue rose 28.8% year-over-year and management is making the company’s main expansion segment.