Alphabet Inc (GOOG)

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Earnings Preview: Alphabet Inc. (NASDAQ: GOOGL)
By: 24/7 Wall St. | February 1, 2023

• Three mega-caps with market values above $1 trillion are all scheduled to report quarterly results after Thursday’s closing bell.

Alphabet

Over the past 12 months, the parent of Google, Alphabet Inc. (NASDAQ: GOOGL), has posted a share price decline of about 27%. The stock’s 52-week high will celebrate its birthday on Thursday. After that rolls off, the stock falls pretty steadily to a 52-week low in early November.

The company has announced that 12,000 employees will be fired to cut costs. Analysts are going to want to know if those layoffs will be enough to boost earnings or if more cost-cutting is in order. Alphabet also faces headwinds in Europe, advertiser spending and a longer-term threat to its Google search engine from ChatGPT.

Analysts continue to be heavily bullish on Alphabet stock. Of 51 ratings, 47 are Buy or Strong Buy, and the other four are Hold ratings. At a recent price of around $99.00 a share, the upside potential based on a median price target of $124.00 is 25.3%. At the high price target of $160.00, the upside potential is 61.6%.

Fourth-quarter revenue is forecast at $76.49 billion, which would be up 10.7% sequentially and by 1.5% year over year. Adjusted EPS are pegged at $1.20 up 12.8% sequentially but down 21.6% year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $4.74, down 15.5%, on revenue of $283.25 billion, up 9.9%.

Alphabet stock trades at about 21.0 times expected 2022 EPS, 1.8.9 times estimated 2023 earnings of $5.27 and 16.1 times estimated 2024 earnings of $6.16. The stock’s 52-week trading range is $83.34 to $151.55. The company does not pay a dividend, and the total shareholder return for the past 12 months is negative 27%.

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