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

If you're on the lookout for a stock that has consistently outperformed earnings estimates, Alphabet (GOOGL) is worth your attention. This prominent player in the Zacks Internet - Services industry has demonstrated the ability to beat expectations, making it a strong candidate for another earnings success.

In the last two reporting periods, Alphabet has shown remarkable results by surpassing earnings estimates. On average, it has exceeded predictions by about 14.50% over these quarters. For instance, in the most recent quarter, the company reported earnings of $1.89 per share, which was higher than the Zacks Consensus Estimate of $1.85 per share. This led to a surprise of 2.16%. In the prior quarter, expectations were set at $1.49 per share, but Alphabet delivered $1.89, resulting in an impressive surprise of 26.85%.

Price and EPS Surprise

Given this track record, analysts have recently adjusted their earnings estimates for Alphabet upwards. Notably, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is currently positive. This is an encouraging indicator of a potential earnings beat, especially when considered alongside its solid Zacks Rank.

Research suggests that stocks showing both a positive Earnings ESP and a Zacks Rank of #3 (Hold) or higher have a strong likelihood of posting positive surprises—around 70% of the time. In practical terms, this implies that out of ten companies sharing this profile, approximately seven might exceed consensus estimates.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the upcoming quarter, with the Most Accurate Estimate reflecting the most recent analyst predictions. This methodology assumes that last-minute revisions by analysts may provide more accurate insights than earlier forecasts.

Currently, Alphabet boasts an Earnings ESP of +1.57%, a sign that analysts are becoming increasingly optimistic about the company's earnings outlook. Coupled with a Zacks Rank of #3, these indicators suggest a strong possibility of another earnings beat in the near future, with the next earnings report expected on October 29, 2024.

It's essential for investors to understand that a negative Earnings ESP could dampen the reliability of this forecasting tool, but it does not necessarily mean the company will miss its earnings target. Sometimes firms will outperform expectations even while their stocks remain flat, while others may not fluctuate significantly after missing predictions.

Thus, checking a company's Earnings ESP before its quarterly earnings report can significantly improve the chances for a favorable investment outcome. Using resources like the Earnings ESP Filter can help investors find the best options to consider right before earnings announcements.

Alphabet, Earnings, Estimates