Earnings season is in full swing as companies are releasing reports highlighting a summer of tumultuous stock prices and economic uncertainty in Asia. Several market leaders are releasing earnings this week, including Google’s new parent company, Alphabet Inc (NASDAQ:GOOGL); Microsoft Corporation (NASDAQ:MSFT); Yahoo! Inc. (NASDAQ:YHOO); and Amazon.com, Inc. (NASDAQ:AMZN).
Alphabet, the new parent company of Google, will release third quarter earnings on Thursday, October 22, after market close. Analysts estimate the company will post earnings per share of $7.20, however estimates range from $6.13 to $8.09, on revenue of $18.54 billion. This revenue figure would mark a 12% year-over-year increase from $16.52 billion.
Alphabet was created this summer to serve as the parent company to Google. The restructuring allows Google to focus on driving revenue from its core business while its offshoot businesses, such as exploratory projects focusing on everything from creating new medical devices to self-driving cars, can be run independently as subsidiaries of Alphabet. As investors get used to the name change, many are looking forward to more transparency and updates on these satellite projects.
The vast majority of analysts remain bullish on Alphabet due to Google’s strong long-term ability to monetize on mobile applications and cloud computing. According to the 26 analysts polled by TipRanks in the last 3 months, 25 are bullish on the company and one is staying on the sidelines. The average 12-month price target for GOOGL is $783.46, marking a 13% potential upside from current levels.
Microsoft Corp will release its fiscal year 2016 first quarter earnings on Thursday, October 22, after market close. Analysts estimate that the company will post EPS of $0.59 on revenue of $20.88 billion, compared to the same quarter of last year in which the company posted EPS of $0.54 on revenue of $23.20 billion.
Investors will be looking for strong Windows 10 adoption rates. The new operating system was released in late July and replaced Windows 8, which many consumers found disappointing. Furthermore, analysts will be looking for positive impact from Microsoft’s recent restructuring announcement. In July, the company revealed that it was reorganizing its phone hardware business and letting go of up to 7,800 employees. The company justified that the move would help its phone hardware business grow from a standalone business to a vibrant ecosystem.
According to the 18 analysts polled by TipRanks in the last 3 months, 11 analysts are bullish on Microsoft; 2 are bearish; and 5 are staying on the sidelines. The average 12-month price target is $49.27, marking a nearly 4% potential upside from current levels.
Yahoo! will post third quarter earnings on Tuesday, October 20, after market close. Analysts expect the company to post earnings per share of $0.17 on $1.02 billion in revenue, compared to the same quarter of last year in which the company posted EPS of $0.52 on revenue of $1.15 billion.
In this earnings report, all eyes will be on mobile growth. Yahoo’s display advertising and search advertising segments have struggled to grow due to strong competition. Investors are hoping that Yahoo will be able to improve its search ads and bolster its core business’s ability to drive revenue. This includes improving video, social, and native advertising abilities.
Investors will also be looking for an update on Yahoo’s efforts to spin off its remaining stake in Alibaba. Yahoo is moving forward with its plan to spin off more than $20 billion worth of BABA shares without clear notice from the IRS regarding the tax status of the transaction. Many analysts are confident that the deal will not be taxed, but others cannot be too sure.
Based on the 22 analysts on TipRanks who have weighed in on Yahoo in the last 3 months, 18 recommend Yahoo as a Buy while 4 are on the sidelines. The average 12-month price target for the stock is $44.55, marking a 33% potential upside from current levels.
Amazon.com will post third quarter earnings on Thursday, October 22, after market close. Analysts estimate that the company will post a loss per share of ($0.11), though estimates range from ($0.48) to $0.10. In the same quarter of last year, the company posted losses per share of ($0.95). Analysts estimate the company will post quarterly revenue of $24.9 billion.
Analysts will be looking for numbers on Amazon’s most recent Prime Day, which was on July 15. Amazon offered more discounts than it did on Black Friday and investors are looking for impressive figures from the online event. Furthermore, analysts will be looking for Amazon’s ability to expand AWS; its cloud computing platform; which became profitable in April.
According to the 32 analysts polled by TipRanks in the last 3 months, 29 are bullish on Amazon while 3 are staying on the sidelines. The average 12-month price target is $642.07, marking a 12% upside from current levels.