Will Alphabet (GOOGL) Beat Estimates Again in Its Next Earnings Report?

If you're interested in a company with a strong track record of outperforming earnings estimates, Alphabet (GOOGL) is worth considering. Operating within the Zacks Internet - Services industry, Alphabet appears to be in an excellent position to achieve another earnings beat in its upcoming quarterly report.

Over the last two reporting periods, this leading internet search engine has shown a remarkable ability to surpass earnings expectations. On average, Alphabet has exceeded these estimates by about 14.50% for the past two quarters.

In its latest quarter, Alphabet reported earnings of $1.89 per share, which was higher than the Zacks Consensus Estimate of $1.85 per share, creating a surprising result of 2.16%. In the preceding quarter, expectations were for earnings of $1.49 per share; however, Alphabet delivered earnings of $1.89 per share, resulting in an impressive surprise of 26.85%.

Understanding Price and EPS Surprise

Considering Alphabet's historical performance, recent earnings estimates for the company have been adjusted upward. Notably, the Zacks Earnings ESP (Expected Surprise Prediction) for Alphabet is currently positive, suggesting a favorable outlook for the company's upcoming earnings report. This positive Earnings ESP, when coupled with a solid Zacks Rank, signals a robust potential for an earnings beat.

Research shows that stocks displaying a combination of a positive Earnings ESP and a Zacks Rank of #3 (Hold) or better typically achieve a positive earnings surprise approximately 70% of the time. This means that for every 10 stocks with this combination, about 7 are likely to exceed consensus estimates.

The Zacks Earnings ESP assesses the Most Accurate Estimate against the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate reflects the most recent analyst opinions, which could be more reliable than earlier predictions contributing to the consensus estimate.

Currently, Alphabet boasts an Earnings ESP of +1.57%, indicating recent analyst optimism regarding the company's earnings outlook. The combination of this positive Earnings ESP and a Zacks Rank of #3 (Hold) suggests that another earnings beat is plausible. Investors can expect the company's next earnings report to be released on October 29, 2024.

If the Earnings ESP turns negative, it diminishes the strength of this prediction. However, a negative value does not necessarily predict a missed earnings estimate.

While many companies may exceed consensus EPS estimates, this alone doesn't guarantee their stock prices will rise. Conversely, some companies may maintain their stock value even with a missed estimate. Hence, it's crucial to assess a company's Earnings ESP before its quarterly results to maximize the probability of an accurate prediction. Utilizing the Earnings ESP Filter could help investors identify top stocks to buy or sell before their earnings reports are announced.

Alphabet, Earnings, Surprise