Stocks To Buy And Watch: Alphabet
Mountain View, Calif.-headquartered Alphabet is the parent company of Google. Alphabet provides online search, internet content services, web advertising and is heavily invested in autonomous driving technology through its Waymo subsidiary.
Google-owned video platform YouTube was a social media winner in 2021, according to an April Pew Research report. “YouTube is the most commonly used online platform asked about in this survey, and there’s evidence that its reach is growing. Fully 81% of Americans say they ever use the video-sharing site, up from 73% in 2019,” Pew Research said. In Alphabet’s most recent earnings release, YouTube advertising came in at $6.01 billion during the quarter — a 49% rise from year ago.
In the most recent quarter, Alphabet earned $21.46 per share on sales of $55.3 billion, representing year-over-year increases of 99% and 34%, respectively. Alphabet boasts three quarters of accelerating earnings and sales growth — a bullish set of fundamental metrics.
For the June-ended quarter — set to be announced on July 27 — analysts expect the company’s earnings to soar 90% to $19.18 per share on revenue of $56.2 billion, according to FactSet.
FANG Stock Leader’s IBD Stock Ratings
The stock shows a strong 95 EPS Rating and a highest-possible A SMR Rating, according to IBD Stock Checkup. The Earnings Per Share Rating tracks a company’s earnings strength. The SMR Rating analyzes a company’s sales, margins and return on equity, and offers a letter grade from A (the best) to E (the worst).
IBD Stock Checkup also shows that GOOGL stock boasts a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
GOOGL Stock Eyes New Buy Point
Following a June 10 breakout, GOOGL stock is in the 5% buy zone past a 2,431.48 buy point in a flat base, according to IBD MarketSmith chart analysis. The 5% buy zone goes up to 2,553.05. Keep in mind the IBD Big Picture states the market uptrend is under pressure, so new buys carry more risk. Also, it’s risky to buy a stock right before the earnings report. Buying options may be a better way to go.
Alphabet is an IBD Leaderboard stock. Leaderboard analysis comments that GOOGL stock is within a slow yet steady uptrend that remains intact since Alphabet’s initial breakout in the summer of 2020. The stock found support at the 50-day line during its consolidation, which eventually took shares to new highs. The new base is second stage, which is positive.
Positively, the stock’s relative strength line shows market-leading strength with an upward angle, a sign of stock market outperformance. The RS line is near new highs, reaffirming the stock as a market leader.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
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