What to Expect From Alphabet Earnings

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Alphabet Inc. (NASDAQ: GOOGL), parent of Google, is scheduled to report its third-quarter earnings report after the markets close on Thursday. The company underperformed in its first-quarter earnings report, but its second-quarter report more than made up for it by pushing shares to just under their all-time highs. Since then shares have risen higher, and we wonder if this report can do even better.

The consensus estimates from Thomson Reuters are $8.64 in earnings per share (EPS) and $22.05 billion in revenue. The same period from last year reportedly had EPS of $7.35 and $18.68 billion in revenue.

The technology giant is one of the top large cap picks among analysts. Alphabet, through its subsidiaries, builds technology products and provides services to organize the information. The company offers Google Search, which provides information online, and Google Now, which offers information to users when they need it.

Top Wall Street analysts cite the company’s growing presence in the cloud, which some ultimately feel can be a $7 billion revenue opportunity by 2020. The current cloud products offered by the company are improving, and the analysts cite five potential strengths and key potential adoption drivers for the company. With the company targeting a total addressable market of $120 billion by 2020, the analysts feel revenue can jump from $1 billion last year to $7 billion by then.

Also, analysts are seeing this company’s channel checks showing relatively solid growth in mobile search, YouTube, programmatic advertising and PLAs for Google. The firm did note that paid search in the United States may have declined marginally, but mobile impressions were up and clicks have increased as well.

Ahead of the report, a few analysts weighed in on Alphabet:

  • RBC Capital Markets reiterated an Outperform rating with a $1,025 price target.
  • Canaccord Genuity reiterated a Buy rating with a $900 price target.
  • Nomura reiterated an Outperform rating with a $925 price target.
  • Credit Suisse reiterated an Outperform rating with a $1,070 price target.
  • Deutsche Bank reiterated a Buy rating with a $1,050 price target.
  • Robert Baird has an Outperform rating with a $900 price target.
  • SunTrust has a Buy rating with a $900 price target.
  • Needham has a Buy rating with a $900 price target.
  • Macquarie reiterated an Outperform rating with a $975 price target.
  • Cantor Fitzgerald reiterated a Buy rating with a $1,000 price target.

So far in 2016, Alphabet has performed more or less in line with the broad markets, with the stock up about 6%. Over the past 52 weeks, the stock is up 13%.

Shares of Alphabet were trading at $796.66 on Thursday, with a consensus analyst price target of $952.60 and a 52-week trading range of $663.06 to $816.68.