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Are earnings already beating Google’s share price?

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Alphabet (Google) (NASDAQ: GOOG) is expected to release its first quarter fiscal 2021 results on Tuesday, April 27. We expect GOOG to beat consensus estimates for both revenue and profit. The company has posted better-than-expected revenue and earnings in each of the past three quarters. Over the past year, the cloud segment of the business has driven revenue growth as several organizations have moved to work from home and digitize. We expect the same to fuel the results for the first quarter of fiscal 2021 as well.

Our forecast indicates that Google Rating is about $ 2,160 per share, which is about 6% less than the current market price of about $ 2,268. Watch our interactive dashboard analysis at Google pre-earnings: what to expect in the first quarter? for more details.

(1) Revenue expected ahead of consensus estimates in Q1

Trefis estimates GOOG’s first-quarter fiscal 2021 revenue to be around $ 54.4 billion, 6% above the consensus estimate of $ 51.3 billion. GOOG’s 2020 revenue of $ 182.5 billion was higher than its 2019 figure, with the cloud segment leading the revenue growth. The other segments have experienced a resumption of growth over the past two quarters. We expect the momentum generated over the past two quarters to continue into the first quarter of fiscal 2021. Overall, we expect revenue of approximately $ 221.6 billion for fiscal 2021. Our dashboard on Google revenue offers more details on the business segments.

(2) EPS likely to beat consensus estimates

GOOG’s earnings per share in the first quarter of 2021 are expected to be $ 17.44 per Trefis analysis, above the consensus estimate of $ 15.90. The company’s net profit margin increased slightly. This increased BPA from $ 49.06 in 2019 to $ 58.61 in 2020. The removal of lockdowns and the steady growth in the vaccination rate have helped to pick up demand across all sectors. In total, the company is expected to report EPS of approximately $ 66.89 in fiscal 2021.

(3) Estimate of the share price 5.8% below the current market price

Through our Google Rating, with an EPS estimate of about $ 66.89 and a P / E multiple of 32.3x in fiscal 2021, results in a price of $ 2,160, or 5.8% below the price current market of about $ 2,268.

Note: P / E multiples are based on the stock price at the end of the year and the reported (or expected) adjusted profit for the full year

Are you looking for reasonably priced software stocks with great room for growth? Discover our theme on Mid-cap SaaS stocks.

See everything Trefis price estimates and Download Trefis data here

What is behind Trefis? Find out how it fuels a new collaboration and why Financial directors and finance teams | Product, R&D and marketing teams


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