As Alphabet (GOOG, Financial) approaches its earnings announcement, options trading remains at typical levels, with call options being purchased at twice the rate of puts. This activity suggests a specific market sentiment regarding the company's upcoming financial disclosures.
The implied volatility for Alphabet indicates that traders are expecting the stock to fluctuate by approximately 5.0%, equivalent to a $7.99 change in the stock price, following the release of its earnings report. This expected movement is slightly below the median change of 6.3% observed over the past eight quarters.
Investors and analysts alike will be watching closely to see how Alphabet's results align with these market projections, potentially impacting the stock's immediate post-earnings performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 17 analysts, the average target price for Alphabet Inc (GOOG, Financial) is $204.53 with a high estimate of $234.00 and a low estimate of $173.00. The average target implies an upside of 27.25% from the current price of $160.73. More detailed estimate data can be found on the Alphabet Inc (GOOG) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, Alphabet Inc's (GOOG, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Alphabet Inc (GOOG, Financial) in one year is $195.25, suggesting a upside of 21.48% from the current price of $160.73. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Alphabet Inc (GOOG) Summary page.
GOOG Key Business Developments
Release Date: February 04, 2025
- Alphabet Revenue: $350 billion for 2024, up 14% year-over-year.
- Q4 Revenue: $96.5 billion, a 12% increase year-over-year.
- Google Services Revenue: $84.1 billion in Q4, up 10% year-over-year.
- Google Cloud Revenue: $12 billion in Q4, a 30% increase year-over-year.
- YouTube Advertising Revenue: $10.5 billion in Q4, up 14% year-over-year.
- Operating Income: $31 billion in Q4, a 31% increase year-over-year.
- Operating Margin: Increased to 32% in Q4.
- Net Income: $26.5 billion in Q4, a 28% increase year-over-year.
- Earnings Per Share (EPS): $2.15, a 31% increase year-over-year.
- Free Cash Flow: $24.8 billion in Q4 and $72.8 billion for the full year 2024.
- Cash and Marketable Securities: $96 billion at the end of Q4.
- CapEx: $14 billion in Q4, primarily for technical infrastructure.
- Share Repurchases: $15 billion in Q4, totaling nearly $70 billion for 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alphabet Inc (GOOG, Financial) reported strong revenue growth, with a 12% increase in Q4 2024, driven by robust performance in Google Search and Cloud.
- The company achieved a significant milestone with its Cloud and YouTube businesses, reaching a combined annual revenue run rate of $110 billion.
- AI advancements, including the launch of Gemini 2.0, have enhanced product capabilities and driven increased consumer and developer engagement.
- Google Cloud saw a 30% revenue increase, with strong demand for AI-powered solutions and strategic deals over $1 billion.
- YouTube continues to lead in streaming watch time in the US, with significant growth in ad revenue, particularly from election-related content.
Negative Points
- Network advertising revenue declined by 4%, impacting overall advertising growth.
- The company faces capacity constraints in its Cloud segment, limiting potential revenue growth despite high demand.
- Foreign exchange rates and the absence of a leap year are expected to negatively impact Q1 2025 revenue.
- Increased capital expenditure, projected at $75 billion for 2025, may pressure profitability due to higher depreciation costs.
- Alphabet Inc (GOOG) anticipates challenges in maintaining growth in the financial services vertical, particularly in the insurance segment.
