Markets

Alphabet reports Q4 earnings January 26

What's Happening

Alphabet ( GOOGL ) will report its fourth-quarter numbers on January 26. The company will report its quarterly numbers after the market close, with the consensus calling for earnings of $9.64, up from $8.67 during the same period last year. GOOGL shares have appreciated 6.3% over the last year.

Technical Analysis

GOOGL was recently trading at $827.39, down $11.61 from its 12-month high and $154.73 above its 12-month low. Technical indicators for GOOGL are bullish and the stock is in a strong upward trend. The stock has recent support above $789.65 and has recent resistance below $834.65. Of the 28 analysts who cover the stock, 24 rate it a "strong buy", two rate it a "buy", one rates it a "hold", and one rates it a "strong sell". The stock receives S&P Capital IQ's 5 STARS "Strong Buy" ranking.

Analyst's Thoughts

After an initial post-election sell off, the tech sector has come back to life, and shares of Alphabet are currently in the upper end of their 52-week level. There are fears that President Trump's immigration policies will have a negative impact on the tech sector workforce, but at this time the market is more focused on the positive potential impact that Trump will have on the overall economy, and in turn the technology sector. For the parent company of Google, Alphabet's earnings rely heavily on the company's advertising revenues, so you can make the case that a stronger overall economy will lead to higher advertising revenues moving forward, which is big reason why sentiment turned so bullish on the stock over the last two months. While the consensus calls for quarterly earnings of $9.64, The Street has a much higher whisper number of $10.00, which set the stage for a big earnings beat, but also sets a high bar that the company needs to hit, or at least come close to for the stock to make any significant move higher. The company has topped estimates for both the top and bottom line in the last two quarters. If the company can post another earnings beat, and show strength in its advertising revenue, the stock should build on recent gains and trade toward a new all-time high.

Stock Only Trade

Bullish Trade

If you want to set up a bullish hedged trade on GOOGL, consider a March 750/755 bull-put credit spread for a 30-cent credit. That's a potential 6.4% return (41.6% annualized*) and the stock would have to fall 8.7% to cause a problem.

Bearish Trade

If you want to take a bearish stance on GOOGL at this time, consider a March 890/895 bear-call credit spread for a 40-cent credit. That's a potential 8.7% return (56.7% annualized*) and the stock would have to rise 7.6% to cause a problem.

Covered Call Trade

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Originally published on InvestorsObserver.com


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GOOGL

Other Topics

Options