Alphabet (GOOGL, $1,296.20) misses revenue estimates; shares decline -5% in after-hours
Alphabet's revenue for the first quarter fell short of expectations, causing the tech giant's shares to lose -5% during after-hours trading Monday.
Google’s parent company reported revenue of $36.34 billion for the quarter, compared to the $37.3 billion expected by analysts polled by FactSet.
Decelerating growth in advertising was a headwind to the company's revenue. Paid clicks on Google properties grew +39% year-over-year for the quarter, which was much slower than the fourth quarter’s + 66% and third quarter’s + 62%.
However, total revenue was still +17% higher compared to the year-ago quarter, as mentioned by Ruth Porat, Chief Financial Officer of both Alphabet and Google. The growth came in at +19% on a constant currency basis. Porat emphasized mobile search, YouTube, and Cloud as major drivers of growth. The company’s hardware and cloud businesses (included in Google’s “other revenues” segment), saw a +25% year-over-year growth to $5.45 billion. Porat indicated that Youtube clicks continued to grow, albeit at a slower pace compared to the same quarter in the preceding year.
Alphabet’s earnings of $11.90 per share managed to beat analysts’ estimates of $10.60 per share.
But net income of $6.66 billion for the period fell sharply from the year-ago quarter’s profit of $9.4 billion.
The European Commission had slapped a $1.7 billion fine on Alphabet as a settlement for alleged anti-competition practices in the online ad business. Excluding the fine, the company’s operating income rose +26% to $8.31 billion.
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Notable companies
The most notable companies in this group are Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Spotify Technology SA (NYSE:SPOT), Baidu (NASDAQ:BIDU), Pinterest (NYSE:PINS), Tencent Music Entertainment Group (NYSE:TME), Snap (NYSE:SNAP), Twilio (NYSE:TWLO), Zillow Group (NASDAQ:Z).
Industry description
Companies in this industry typically license software on a subscription basis and it is centrally hosted. Such products usually go by the names web-based software, on-demand software and hosted software. Cloud computing has emerged as a major force in this space, making it possible to save files to a remote database (without requiring them to be saved on local storage device); as long as a device has access to the web, it can access the data and the software programs to run it. This has in many cases facilitated cost efficiency, speed and security of data for businesses and consumers. Alphabet Inc., Facebook, Inc. and Yahoo! Inc. are some well-known names in the internet software/services industry.
Market Cap
The average market capitalization across the Internet Software/Services Industry is 60.93B. The market cap for tickers in the group ranges from 1.11K to 1.94T. GOOGL holds the highest valuation in this group at 1.94T. The lowest valued company is MSEZ at 1.11K.
High and low price notable news
The average weekly price growth across all stocks in the Internet Software/Services Industry was -1%. For the same Industry, the average monthly price growth was -0%, and the average quarterly price growth was 2%. TRFE experienced the highest price growth at 53%, while QQQFF experienced the biggest fall at -58%.
Volume
The average weekly volume growth across all stocks in the Internet Software/Services Industry was 15%. For the same stocks of the Industry, the average monthly volume growth was 9% and the average quarterly volume growth was -8%
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Valuation Rating: 45
P/E Growth Rating: 72
Price Growth Rating: 59
SMR Rating: 84
Profit Risk Rating: 92
Seasonality Score: -6 (-100 ... +100)