Alphabet Inc (GOOG)

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Earnings Preview: Alphabet Inc. (NASDAQ: GOOGL)
By: 24/7 Wall St. | July 25, 2022

• Here’s a look at four companies set to report results before markets open Tuesday morning.

Alphabet

Over the past 12 months, the parent of Google, Alphabet Inc. (NASDAQ: GOOGL), has posted a share price decline of more than 15%. Since early April, the shares are down more than 25%. The company’s 20-for-1 stock split took effect Monday morning, dropping the per-share price to about $108.00 from more than $2,100.00. While the split places Alphabet on the short list of companies that might be added to the Dow (along with Amazon, which completed a similar split in April), investors will pay more attention to comments regarding ad spending and regulation. Ad spending is projected to be 3% to 4% lower in the second half of the year, and regulation, particularly in Europe, is tightening.

Analysts, however, remain universally bullish on the stock. Of 50 ratings, 48 give the stock a Buy or Strong Buy rating, and the other two have a Hold rating on the shares. At a recent split-adjusted price of around $107.90, the upside potential based on a median price target of $150.00 is 39%. At the high price target of $205.90, the upside potential is nearly 91%.

Second-quarter revenue is forecast at $69.95 billion, up 2.8% sequentially and up 13% year over year. Adjusted earnings per share (EPS) are pegged at $1.29, up 5.2% sequentially and down 5.1% year over year. For the full 2022 fiscal year, current consensus estimates call for EPS of $5.48, down 2.3%, on revenue of $294.51 billion, up 14.3%.

Alphabet stock trades at a multiple of 19.7 times expected 2022 EPS, 16.7 times estimated 2023 earnings of $6.47, and 14.8 times estimated 2024 earnings of $7.29. The stock’s split-adjusted 52-week range is $101.88 to $151.55. The company does not pay a dividend and the total shareholder return for the past 12 months is negative 16%.

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