Actions of Google Parent Alphabet Inc. (GOOGL – Free Report) have appeared since Christmas, as well as other giants of FAANG, Amazon (AMZN – Free Report), Netflix (NFLX – Free Report) and Facebook (FB – Free Report). Despite this recent increase, the GOOGL stock is about 18% below its 52-week high and has impressive growth forecasts.
Google has become one of the most valuable companies in the world thanks to its search engine. Today, Google controls about 37.1% of the total digital advertising market in the United States, which is 20.6% of Facebook's second place. During the last quarter, Google's advertising activity jumped about 20% to $ 28.95 billion.
The other divisions of Alphabet have also helped to increase the company's overall revenues recently. The company's Pixel smartphones are currently competing with Apple (AAPL – Free Report) and other smartphone manufacturers. In addition, Google's new Home Hub is gaining ground on the broader market for Home Assistants due to the ramp-up of Amazon Alexa-enabled devices.
In fact, "Google's other revenue," which includes the Google Play Store, Google's cloud offerings and hardware business, saw its revenue grow $ 1.05 billion, or more than 29%, to $ 4.64 billion last quarter. At the same time, Google's "other bets" segment grew about 25% to $ 146 million. This activity includes its Waymo autonomous car segment, among other divisions geared towards the future.
Despite Google's growth and the inordinate influence of our digital age, its stock price has fallen about 6% over the past year, including its 8% rise after Christmas. GOOGL shares also plunged from 1.33% Friday to $ 1,064.47 per share. This marks a drop of about 18% from its peak of $ 1,063.59 in 52 weeks.
Outlook and revenue trends
According to Zacks' current forecast, Alphabet should see its revenues increase by 20.8% in the fourth quarter of 2018, reaching $ 31.26 billion. At the same time, the Company's revenue for fiscal 2019 is expected to increase by 20.4% from our current year estimate to reach $ 131.85 billion.
At the bottom of the income statement, GOOGL is expected to see its fourth quarter adjusted earnings climb 14 percent to $ 11.06 a share. At the same time, the company's profits for the year 2018 should exceed 31%. In anticipation of the following year, Alphabet's adjusted earnings for fiscal 2019 are expected to increase by almost 13% from our estimate for 2018.
Investors should also note that GOOGL has generated estimated earnings revisions for the fourth quarter, as well as for 2018 and 2019 in the last 30 days. This means that at least some analysts are more optimistic about the search engine giant than at the beginning of the quarter.
Alphabet is currently ranked # 2 by Zacks (purchase) based, largely, on the recent activity of revising its earnings estimates. In addition, the stock of the technology giant is 18% below its peak of 52 weeks.
In the future, it seems hard to imagine that Google is abandoning much of its dominance of digital ads, despite the emergence of Amazon on the power of online advertising. Google, Facebook and Amazon will likely become even more attractive as Netflix and other companies that do not benefit from advertising steal more people on linear TV.
In addition, the other bets division of the company could eventually bear fruit over the next decade. Recall that Google has been the subject of criticism for its massive control over the flow of information. Government intervention is always a possibility, as unlikely as it is.
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