A Glimpse of Alphabet's Earnings Potential

Alphabet GOOGL is gearing up to announce its quarterly earnings on Thursday, 2025-04-24. Here's a quick overview of what investors should know before the release.

Analysts are estimating that Alphabet will report an earnings per share (EPS) of $2.02.

Alphabet bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.

New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).

Performance in Previous Earnings

In the previous earnings release, the company beat EPS by $0.02, leading to a 7.29% drop in the share price the following trading session.

Here's a look at Alphabet's past performance and the resulting price change:

Tracking Alphabet's Stock Performance

Shares of Alphabet were trading at $151.47 as of April 22. Over the last 52-week period, shares are down 0.73%. Given that these returns are generally negative, long-term shareholders are likely upset going into this earnings release.

Analyst Opinions on Alphabet

For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding Alphabet.

The consensus rating for Alphabet is Outperform, derived from 23 analyst ratings. An average one-year price target of $198.17 implies a potential 30.83% upside.

Analyzing Ratings Among Peers

In this analysis, we delve into the analyst ratings and average 1-year price targets of Meta Platforms, Reddit and Pinterest, three key industry players, offering insights into their relative performance expectations and market positioning.

• Analysts currently favor an Outperform trajectory for Meta Platforms, with an average 1-year price target of $723.48, suggesting a potential 377.64% upside.
• Analysts currently favor an Outperform trajectory for Reddit, with an average 1-year price target of $177.67, suggesting a potential 17.3% upside.
• Analysts currently favor an Buy trajectory for Pinterest, with an average 1-year price target of $42.41, suggesting a potential 72.0% downside.

Peer Analysis Summary

The peer analysis summary offers a detailed examination of key metrics for Meta Platforms, Reddit and Pinterest, providing valuable insights into their respective standings within the industry and their market positions and comparative performance.

Key Takeaway:

Alphabet ranks at the top for Gross Profit and Return on Equity among its peers. It is in the middle for Revenue Growth.

About Alphabet

Alphabet is a holding company that wholly owns internet giant Google. The California-based company derives slightly less than 90% of its revenue from Google services, the vast majority of which is advertising sales. Alongside online ads, Google services houses sales stemming from Google's subscription services (YouTube TV, YouTube Music among others), platforms (sales and in-app purchases on Play Store), and devices (Chromebooks, Pixel smartphones, and smart home products such as Chromecast). Google's cloud computing platform, or GCP, accounts for roughly 10% of Alphabet's revenue with the firm's investments in up-and-coming technologies such as self-driving cars (Waymo), health (Verily), and internet access (Google Fiber) making up the rest.

Key Indicators: Alphabet's Financial Health

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

Revenue Growth: Alphabet displayed positive results in 3 months. As of 31 December, 2024, the company achieved a solid revenue growth rate of approximately 11.77%. This indicates a notable increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Communication Services sector.

Net Margin: The company's net margin is a standout performer, exceeding industry averages. With an impressive net margin of 27.51%, the company showcases strong profitability and effective cost control.

Return on Equity (ROE): Alphabet's financial strength is reflected in its exceptional ROE, which exceeds industry averages. With a remarkable ROE of 8.3%, the company showcases efficient use of equity capital and strong financial health.

Return on Assets (ROA): Alphabet's ROA excels beyond industry benchmarks, reaching 6.03%. This signifies efficient management of assets and strong financial health.

Debt Management: Alphabet's debt-to-equity ratio is below the industry average. With a ratio of 0.08, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

To track all earnings releases for Alphabet visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.