The Street Frowns on Alphabet Inc (GOOGL) Revenue Miss

Marco Green
October 28, 2018

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On 26 October an analyst note was shared with investors on Alphabet (NASDAQ:GOOGL) of its "Overweight" Rating reiterated by stock research analysts at Barclays. KHP Capital LLC bought a new position in Alphabet Inc Class A during the first quarter worth $124,000. Magellan Asset Management Ltd grew its holdings in Alphabet by 684.2% in the first quarter. Hedge funds and other institutional investors own 34.19% of the company's stock.

Shares of NASDAQ:GOOG traded down $24.10 during mid-day trading on Friday, hitting $1,071.47.

The end result is that Alphabet and Google made a lot of money this year, and with new projects in the pipeline which Pichai touched on in the earnings call including Project Stream and future new markets like China with their controversial modified search, there's more profits coming.

Their third-quarter profit of $9.19 billion exceeded expectations but missed estimates. Alphabet had a return on equity of 18.24% and a net margin of 13.16%.

Amazon, the biggest online retailer, on Thursday reported a second consecutive quarter of sales that fell short of estimates - the first back-to-back revenue miss in nearly four years. Alphabet's revenues in the just-finished quarter also lagged analyst forecasts. Amazon's cloud business saw a 46 percent rise in revenue to $6.68 billion, only narrowly edging past estimates of $6.67 billion.

A number of equities research analysts have weighed in on the stock. Wedbush set a $1,350.00 price target on shares of Alphabet Inc Class A and gave the stock a buy rating in a report on Friday. Alphabet presently has a consensus rating of "Buy" and a consensus target price of $1,301.81. On Tuesday, July 24 the stock rating was maintained by Citigroup with "Buy".

Among 14 analysts covering Alphabet Inc (NASDAQ:GOOGL), 12 have Buy rating, 0 Sell and 2 Hold. Raymond James restated an "outperform" rating and issued a $1,300.00 price objective (down previously from $1,405.00) on shares of Alphabet in a report on Friday.

In related news, SVP David C. Drummond sold 5,690 shares of the stock in a transaction that occurred on Monday, August 13th. The stock was sold at an average price of $1,206.20, for a total transaction of $96,496.00. S&P 500 e-minis were down 33 points, or 1.23 percent, and Nasdaq 100 e-minis were down 164.75 points, or 2.38 percent. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. The company's stock fell 3.3 per cent to $1,060 in after-hours trading. The shares were sold at an average price of $1,244.09, for a total value of $7,078,872.10. Following the completion of the sale, the director now owns 3,485 shares in the company, valued at $4,245,427. The disclosure for this sale can be found here. The company's earnings per share for the three-month period from July to September was $13.06, compared to $10.42 per share, according to Wall Street forecasts.

Alphabet Inc., through its subsidiaries, provides online advertising services in the United States, the United Kingdom, and rest of the world. The firm offers performance and brand advertising services.

The mixed results come with Google under scrutiny along with other tech firms for its privacy and data protection policies, and new revelations on the company's handling of sexual harassment claims.

Google has posted strong revenue growth for several years as retailers flock to buy product image ads on Google's search engine and commercials on YouTube.

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