What to Watch When Alphabet Reports Q1 Results

Alphabet Inc. (NASDAQ: GOOGL) is scheduled to release its most recent quarterly results after the markets close on Tuesday. The consensus estimates are calling for $10.33 in earnings per share (EPS) and $40.38 billion in revenue. The first quarter of last year reportedly had $9.50 in EPS and $36.34 billion in revenue.

In Alphabet’s most recent quarter, the Google segment posted revenues of $45.8 billion, up from $39.0 billion in the fourth quarter of 2018. The company added some new metrics to its report this quarter. YouTube ad revenues increased 30.8% year over year to $4.72 billion, and at Google Cloud it increased 53.0% to $2.61 billion.

In the fourth quarter, year-over-year traffic acquisition costs paid to Google Network members increased by 14%. Total traffic acquisition costs rose from $7.44 billion to $8.50 billion.

While Alphabet is the largest provider of advertising in the United States and dominates search throughout most of the world, analysts worry that the spread of the novel coronavirus will cut demand for ads. First-quarter results should shine some light on this.

Excluding Monday’s move, Alphabet stock has outperformed the Dow Jones industrial average and S&P 500, with its share price down about 5% year to date. In the past 52 weeks, shares are relatively flat.

A few analysts weighed in on Alphabet ahead of the results:

  • RBC rates it as Buy with a $1,350 price target.
  • Wells Fargo has a Buy rating with a $1,500 price target.
  • Credit Suisse has an Outperform rating and a $1,500 target.
  • SunTrust Banks has a Buy rating with a $1,350 target price.
  • Wedbush’s Outperform rating comes with a $1,375 price target.
  • Mizuho has a Buy rating with a $1,500 target price.
  • Pivotal Research has a Buy rating and a $1,425 price target.

Alphabet stock traded down over 1% at $1,252.07 on Tuesday, in a 52-week range of $1,008.87 to $1,530.74. The consensus price target is $1,472.18.