Alphabet (NASDAQ:GOOGL) will release its quarterly results on October 29, as the Q3 earnings season reaches a peak next week with some of the market’s biggest names set to report.
The search giant has been hogging the headlines recently, and not for good reasons. In August, a federal judge ruled in favor of the U.S. Justice Department in its case against Google, accusing it of monopolistic and anticompetitive behavior. While no remedies were provided then, earlier this month, the DOJ made several proposals. These include ending exclusive deals with companies like Apple and Samsung, limiting data tracking, and potentially forcing structural changes like selling off Chrome or Android.
Monness’ Brian White, an analyst ranked in the top 1% of Street stock experts, thinks maybe the time of reckoning has finally come for the tech behemoth.
“After years of operating in the shadows of the arcane world of the internet, the DOJ is now shining a light on Google’s sins of the past,” White said. “In our view, Google’s shortcomings are many. Moreover, we believe Google has become too powerful.”
That power will see GOOGL net revenue of at least $87.44 billion in the quarter, according to White, amounting to 14% year-over-year growth (the same as Q2 growth) and beating the Street’s forecast of $86.31 billion. Likewise for the bottom line, White is calling for an EPS of $1.92 vs. consensus of $1.84. For the Q4 outlook, the “seasonally strongest quarter,” White is also above consensus, forecasting revenue of $96.01 billion (an 11% y/y increase) and EPS of $2.05, compared to the Street’s respective $95.83 billion and $2.04.
So, it’s a bit of a mixed message from White with Alphabet due to get their comeuppance, but also ready to surprise to the good in the near-term. Yet, with the company facing an ominous antitrust landscape and “dynamic” competition, White stays on the sidelines with a Neutral rating and no fixed price target in mind. (To watch White’s track record, click here)
Other analysts do have a target, and the Street’s average price lands at $200.50, implying the stock could gain ~21% over the next 12 months. On the rating front most stay bullish too, as the stock claims a Strong Buy consensus rating, based on a mix of 29 Buys vs. 9 Holds. (See Alphabet stock forecast)
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