Can Alphabet (GOOGL) Deliver Another Positive Earnings Surprise?

Friday, October 25, 2019 3:53 PM | Michael Fowlkes

What's Happening with GOOGL

Alphabet (GOOGL), the parent company behind search engine leader Google, reports its third-quarter numbers October 28. The company will report its numbers after the market close with the consensus calling for earnings of $12.57 per share. During the same period last year the company earned $13.05 and the stock has gained 21% year to date.

Technical Analysis

GOOGL was recently trading at $1265.25 down $31.72 from its 12-month high and $287.59 above its 12-month low. InvestorsObserver’s Stock Score Report gives GOOGL a 78 long-term technical score and a 67 short-term technical score. The stock has recent support above $1200 and recent resistance below $1297. Of the 30 analysts who cover the stock 23 rate it Strong Buy, 4 rate it Buy, 3 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, GOOGL gets a score of 62 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

Despite Google’s size, the company continues to grow with earnings up 16% per annum over the last five years, and analysts expect the company to continue growing profits at an annual rate of 15.8% over the next five years. Google has a stranglehold on the search market, with just Facebook (FB) managing to pose any real competition in the sector. The company reported strong numbers last quarter, topping estimates on both the top and bottom line which drove shares sharply higher. Google does have the same exposure in China as most of the tech sector, which has helped the stock remain strong and shares are currently trading just shy of its all-time high. The street expects to see another positive earnings surprise for the recent quarter with a whisper number of $12.94. The stock is currently trading at 22 times future earnings which is reasonable considering its strong growth rate and the stock should build on its recent gains on a positive surprise. Analysts have an average price target of $1,386.77 on the stock.

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