Alphabet (GOOGL) 2Q 2019 Earnings Preview

Alphabet (GOOGL) has lost more than 11% since April high of 1289, when the company announced 1Q 2019 revenue of $36.34 billion, up 16.7% that missed market’s expectations. Alphabet also slumped early June following reports that U.S. Justice Department (DOJ) was working on an antitrust probe into the top search engine. The stock also got a hit after President Trump pledged to look into allegations by Facebook (FB) board member Peter Thiel that Google should be investigated for “treason” for its ties to Chinese government.

Alphabet is expected to report earnings on July 25.

Alphabet (GOOGL) analysts are looking for earnings of $11.25 to  $11.33 per share in 2Q 2019, compared to year-ago EPS of $4.54, and forecasting a 16.9% increase in revenue to $38.17 billion. While that’s slightly better than Q1, it’s still far slower than Alphabet’s historic growth rates.

In first Quarter 2019, GOOGL reported weaker revenue which slowed to 15.3% y/y, and a sharply slower pace than 19.9% growth in Q4 2018 and also below 24.4% growth in the Q1 of 2018.

Alphabet will break its results down into two categories: Google, which generates the vast majority of its revenue and “other businesses”.

Within Google ad revenue last quarter rose just over 15 percent to $30.72 billion, driven by products ranging from Google Search to YouTube and Gmail. Last quarter, non-advertising revenue within Google grew 25 percent to roughly $5.45 billion.

Alphabet will further break this down into advertising revenue from Google’s own properties (up 16.7% last quarter to $25.68 billion), and sales generated by its network members’ sites (up 8.5% to $5.04 billion in Q1).

Google segment also includes massively popular platforms like Cloud, Android, Maps, Chrome, Google Drive, the Google Play Store, and its various hardware products like the Google Home smart speakers, Chromecast devices, Nest thermostats and security cameras, and its Pixel line of smartphones.

The other business segment remains unprofitable as it incurred an operating loss of $868 million last quarter on revenue of $170 million. Sales for other business are largely driven by Alphabet’s Fiber high-speed internet service and Verily life sciences products. Other business also includes companies like Waymo, the self-driving vehicle subsidiary.Don’t miss a beat! Follow us on Twitter. Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.

Facebook Earnings July 24: Download our FB earnings preview report today.

GOOGL Stock
Previous Close 1,146
52 Week Range 970-1,289
Avg. Volume ####
Market Cap 785B
Beta (3Y Monthly) 0.99
PE Ratio (TTM) 28.35
EPS (TTM) 39.86
Stock Price History
Beta (3Y Monthly) 0.99
52-Week Change -4.91%
S&P500 52-Week Change 3 6.70%
52 Week High 1,289
52 Week Low 970
50-Day Moving Average 1,102
200-Day Moving Average 1,138
GOOGL Valuation
Market Cap (intraday) 785B
Enterprise Value 683B
Trailing P/E 28.35
Forward P/E 21.03
PEG Ratio (5 yr expected) 2
Price/Sales (ttm) 5.53
Price/Book (mrq) 4.28
Enterprise Value/Revenue 4.81