OK, Google. It’s officially earnings season again, and time to show investors what you’re made of.
Google parent Alphabet (NASDAQ:GOOGL) is set to release second-quarter 2018 results after the market close today. With shares of the internet giant climbing about 13% since it last reported in late April, now’s a great time to take a closer look at what we should expect.
RBC’s top analyst Mark Mahaney expects gross revenue of $32.48 billion, net revenue of $25.82 billion, Adjusted EBITDA of $12.86 billion, and GAAP EPS of $10.29.
Mahaney noted, “Our gross revenue and net revenue estimates are above consensus (at $32.22B and $25.63B, respectively) and our GAAP EPS estimate of $10.29 is also above the Street at $9.69. We believe high TAC remain headwinds, tho less so than in prior quarters as TAC growth likely decelerates beginning in Q2 (RBCe +51% Y/Y growth in Q2 vs. +61% Y/Y in Q1). Following the EC fine on Android, we believe GOOGL may be moving past peak regulation in the near term. EPS season so far (AKAM, NFLX, EBAY) has revealed a material negative headwind from FX. We would estimate that FX may have clipped Q2 revenue by $300-$500MM (up to 2%).”
Net net, Mahaney reiterates an Outperform rating on Alphabet with a price target of $1,285, which implies an upside of 6% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a yearly average return of 28.4% and a 75.5% success rate. Mahaney has a 20.2% average return when recommending GOOGL, and is ranked #11 out of 4840 analysts.
Overall, when it comes to Wall Street’s bet, the odds are on this internet giant, with TipRanks analytics showcasing GOOGL as a Strong Buy. Out of 23 analysts polled in the last 3 months, 20 are bullish on Alphabet stock while 3 remain sidelined. With a return potential of nearly 5%, the stock’s consensus target price stands at $1,270.75.