Based in Mountain View, California, Alphabet Inc. (GOOG) is a technology company that provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products through its subsidiaries. The search engine giant is valued at a market cap of $2.4 trillion.
This communication service provider’s shares have outperformed the broader market over the past 52 weeks. GOOG has soared 27.3% over this time frame, while the broader S&P 500 Index ($SPX) has gained 22.6%. Moreover, over the past six months, the stock is up 15.2%, compared to SPX’s 10.5% rise.
However, zooming in further, Alphabet has lagged behind the Communication Services Select Sector SPDR ETF Fund’s (XLC) 30.1% gain over the past 52 weeks and 20.6% return on a six-month basis.
Shares of Alphabet closed up 2.9% following its better-than-expected Q3 earnings release on Oct. 29. Robust growth in the company’s cloud revenues, core advertising business revenues, and long-term focus and investment in AI resulted in a 15% year-over-year growth in its top line figure to $88.3 billion, which surpassed Wall Street’s expectations. Moreover, the company reported a notable 36.8% year-over-year growth in EPS to $2.12 per share, which exceeded the forecasted figure by a whopping 15.8%. GOOG’s ongoing efforts to improve efficiency helped deliver improved margins.
For the current fiscal year, ending in December, analysts expect Alphabet’s EPS to grow 38.3% year over year to $8.02. The company’s earnings surprise history is promising. It topped the consensus estimates in each of the last four quarters.
Among the 50 analysts covering the stock, the consensus rating is a “Strong Buy,” which is based on 39 “Strong Buy,” three “Moderate Buy,” and eight “Hold” ratings.
On Jan. 24, Scotiabank maintained a “Sector Outperform” rating on GOOG and raised its price target to $240- the Street-high price target, which indicates a 21.7% potential upside from the current levels. Meanwhile, the mean price target of $216.83 represents a 10% upside from Alphabet’s current price levels.
