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Best tech/finance blogger on TipRanks. Alex Cho is ranked 7th among all financial bloggers, with a sector focus of technology stocks. The research he publishes captures the long-term growth potential of tech franchises, and market valuation. His research recommendations over the span of five-years has averaged into an annualized return of 19.3% across 392 ratings of which 66% were successful. Over his years of publishing, Alex Cho has been an indispensable source of information for an investment minded audience, which is why his lifetime viewership has exceeded ten million in total since 2012, across various media platforms. Furthermore, he’s frequently cited in various local business journals across the United States, and is frequently tagged with the “in-depth” designation on Google News for his public articles. The quality of his research is well known, and is well-respected which is why he’s frequently cited by other authors, journalists, bloggers and experts. Alex Cho was a former founding partner of Alexander & Cohen Capital Management, has worked as a consultant for mid-stage tech companies looking to raise capital or form an exit strategy, with the most recent consultation billed to a client that was generating revenue of $10 million+ in the web domain/registrar segment. Alex Cho is frequently invited to interview members of management at various Fortune 500 tech companies’ due to his outstanding media credentials, and credibility. Furthermore, he frequently attends various tech media events at the request of the event organizers. Alex Cho has a great relationship with Wall Street and Silicon Valley, as well. In the Venture Capital Space, he has sources that are inclusive of VC Partners, and independent research from PitchBook, Mercury Data, eMarketer, MergermarketGroup, and so forth. Anyone facing the public with investment related material needs quality sources, which should be inclusive of insights from Private Equity and various sell-side institutions and debt rating agencies as well (Standard & Poor’s, Fitch, & Moody’s). Alex Cho publishes with the support of Bank of America Merrill Lynch, Morgan Stanley Americas, Royal Bank of Canada Capital Markets, United Bank of Switzerland AG, Barclays Americas, Goldman Sachs, J.P. Morgan, Credit Suisse AG, PiperJaffray, Wedbush Securities, Oppenheimer & Co., Nomura Securities, BMO Capital Markets, Raymond James, Pacific Crest, SunTrust, Mizuho Securities, Deutsche Bank and Canaccord Genuity. Alex Cho attended ASU via the MAPP program with a 3.76 GPA in business-finance. The genius behind Cho has less to do with his academic accomplishments, but rather his ability to navigate, adapt, and improve the quality of his work through all the activities he has engaged. In the past year, Alex Cho has launched a new marketplace service referred to as Cho’s Investment Research. To learn more about this service, or to receive article notifications, be sure sure to subscribe. We provide frequent updates via our Blog Posts, which goes out to our subscribers.

Alphabet (GOOGL) Earnings on Tap: Can the Stock Live Up to Its Higher Stock Price?


Alphabet (GOOGL) will report results for its first quarter of 2019 after market close today. With shares recently hitting 52-week highs, the earnings report comes at an important time for the stock. Can Alphabet continue to justify its pricey valuation?

With the company’s search and advertising business expected to sustain or extend its per usual growth CAGR of 20%+, the regulatory headwinds could add somewhat of a damper due to the passage of some controversial legislation referred to as the Copyright Overhaul in the EU. The EU has been a persistent thorn in the side of Alphabet, so any added commentary relating to its regulatory woes would be constructive on the company’s earnings call.

That being the case, investors should anticipate that with Alphabet’s solid track-record of delivering and meeting its own financial guidance that it will report revenue and dil. EPS above consensus estimates. Alphabet’s not known to be streaky, or to have lapses where the company’s unable to deliver on financial results for shareholders, as the company has been a steady growth vehicle for quite a while. Not to mention, the company’s advertising Suite is extremely competitive with more advertisers indicating that advertising ROI has improved with Google versus competitors.

Currently, the consensus anticipates that GOOGL will deliver revenue and dil. EPS of $37.34 billion and dil. EPS of $10.58. The company’s revenue is anticipated to grow by +19.9% y/y whereas the dil. EPS figure is expected to decline by -20.6% y/y. The divergence in earnings has to do with an anti-trust fine costing the company $1.7 billion, which they will recognize in Q1’19. To date, Alphabet has spent $9.4 billion relating to litigation related charges in the EU, which is why financial results have only soured on regulatory dynamics and financial settlements, as opposed to anything else, really.

The stock was mostly unaffected by the market correction, which sent the majority of stocks lower. Earnings results rarely miss expectations, but very rarely does Alphabet announce something so spectacular tied to its earnings results that investors should anticipate a meaningful jump following the announcement of earnings. It’s a great defensive growth stock with very limited volatility, so the plus side is that the low volume buying will likely continue regardless of whether Alphabet delivers a slight beat, or meets consensus estimates on both revenue and earnings.

Michael Pachter from Wedbush anticipates that Alphabet will report a slight beat on revenue however:

We assume year-over-year growth rates of 21.6% for Google Properties revenues, 13.6% for Google Network Members’ Properties revenues, 31.1% for Google Other revenues, and 13.3% for Other Bets revenues, resulting in an overall revenue growth rate of 21.7%. Our revenue growth estimate for Q1:19 compares to growth of 21.5% in Q4:18, and 25.8% in Q1:18, largely reflecting continued solid growth against an increasingly large and maturing base. We are maintaining our OUTPERFORM rating and 12-month price target of $1,350 per share. Our price target is based upon a multiple of roughly 14x our 2020 adjusted EBITDA estimate, a slight discount to the 15x valuation multiple we have assigned to Facebook and compared to Alphabet’s 5-year historical average of 11x.

Promising commentary heading out of the quarter relating to sustained advertising execution from a variety of Google properties, along with efforts to improve the ad-suite is customary to Google’s earnings announcements. GOOGL probably won’t deviate from that formula of discussing financial results. So as long as GOOGL can continue to illustrate impressions growth that offset a more competitive pricing environment for ad units, the quarter will be viewed as a success.

Also, the absence of EU related charges will make Q2’19 outlook that much better. Assuming they can get a tighter grip on regulatory challenges, investors will have fewer things to worry about. It might be wishful thinking, but one could hope.

TipRanks’ data shows an overwhelmingly bullish camp backing the tech giant. GOOGL stock has amassed 25 ‘buy’ ratings in the last three months, with just two analysts playing it safe with a hold rating. However, the 12-month average price target stands at $1,351.83, suggesting the stock has only 5% upside from current levels. (See GOOGL’s price targets and analyst ratings on TipRanks)

 

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