Alphabet on Strong Footing, Could Scale to Fresh Record High on Upbeat Q3 Earnings
The parent of Google and the world’s largest search engine that dominates internet search activity globally, Alphabet, is expected to report its third-quarter earnings of $23.84 per share, which represents year-over-year growth of about 45% from $16.4 per share seen in the same period a year ago.
The Mountain View, California-based internet giant would post revenue growth of more than 35% to around $51.4 billion. In the last two years, the company has beaten earnings per share (EPS) estimates most of the time with a surprise of over 25%.
Alphabet’s better-than-expected third-quarter earnings results, which will be announced on Tuesday, October 26 after the close of trading, could help the stock scale to a fresh record high. The company’s shares rose over 57% so far this year. It was trading 2.68% lower at $2,761.66 on Friday.
“We remain bullish on Search strength amid an ongoing ad market recovery and following our Digital ad expert check-call on 10/7, which suggested strong Search spend (despite tougher comps) as CPCs continue to drive growth. Our 3Q21 net rev. (+39% y/y), EBITDA, & EPS are all above consensus. We also expect robust Holiday spending, despite inventory issues. Maintain Outperform & $3,300 Price Target,” noted John Blackledge, equity analyst at Cowen.
“We currently forecast 13% and 14% annual gross and net revenue growth respectively’21-’26 and EBITDA growth of ~14% over the time period.”
Alphabet Stock Price Forecast
Thirty-one analysts who offered stock ratings for Alphabet in the last three months forecast the average price in 12 months of $3,209.24 with a high forecast of $3,600.00 and a low forecast of $3,000.00.
The average price target represents a 16.32% change from the last price of $2,759.00. All of those 31 analysts rated “Buy”, according to Tipranks.
Morgan Stanley gave the base target price of $3,000 with a high of $3,500 under a bull scenario and $2,100 under the worst-case scenario. The firm gave an “Overweight” rating on the information services provider’s stock.
Several other analysts have also updated their stock outlook. Mizuho raised the price target to $3,100 from $3,000. Bernstein lifted the target price to $3,250 from $3,200. RBC initiated the coverage with outperform rating and a $3,400 target price.
Check out FX Empire’s earnings calendar