Alphabet
GOOGL
is scheduled to report second-quarter 2022 results on Jul 26.
For the quarter under review, the Zacks Consensus Estimate for revenues is pegged at $57.9 billion, indicating an improvement of 13.5% from the year-ago reported number.
The consensus mark for earnings is pegged at $1.30, indicating a 4.4% decline from the previous year’s reported figure. Notably, the figure has moved 0.8% downward over the past seven days.
The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same once, delivering an earnings surprise of 17.21%, on average.
Search, Ad & Cloud Momentum to Aid Growth
Alphabet’s expanding ad services portfolio, robust search engine and improving search results are likely to have benefited the second-quarter performance.
The company’s continued efforts toward innovation of AI techniques for the advancement of its search segment, which accounts for the major portion of the total revenues, is expected to have continued driving traffic on its platform in the to-be-reported quarter. The growing momentum across its mobile search is anticipated to have been another positive.
The introduction of the multi-search feature in Google Search is likely to have continued enhancing the search results. The feature allows users to use both words and images in their search query.
Apart from this, a new feature, which helps find healthcare providers who book appointments online and accept users’ insurance, is anticipated to have continued aiding its traffic acquisition efforts in the healthcare field.
Technical advancements in Google Assistant and Google Maps are expected to have driven the momentum across search, which, in turn, is expected to have contributed well to the second-quarter performance of Google Services.
Strengthening entertainment, learning and educational content on YouTube is anticipated to have continued boosting the adoption rate of the app in the quarter under review.
Google has been gaining traction with the Local Services ads. This is expected to get reflected in its second-quarter advertisement revenues. Solid momentum across retail, media & entertainment, finance, and travel categories is likely to have aided growth in its advertising business.
Coming to cloud prospects, Google has been significantly gaining momentum in the highly competitive cloud market on the back of its expanding cloud services portfolio and an increasing number of data centers. The impacts of the same are expected to have driven the company’s cloud revenues in the quarter under review.
The solid adoption of Google Workspace is likely to have contributed well to the performance of the Google Cloud segment.
Android, Meet & Waymo Efforts to Consider
Google’s strength across Android, Meet and autonomous driving is anticipated to have aided its second-quarter performance.
The growing momentum across Android 12 is likely to have benefited the company’s performance in the to-be-reported quarter. New widgets designed for personalizing phones, new dashboards and indicators for privacy management, and more gesture features, which aid in communication and controlling phones, are expected to have continued bolstering the adoption rate of Android 12.
Google’s persistent efforts to infuse its video conferencing software Google Meet with advanced features are likely to have bolstered its user base in the quarter to be reported.
The growing prospects around Alphabet’s self-driving unit, Waymo, are expected to have been major tailwinds. The expansion of its ride-hailing operation across multiple locations is expected to have benefited its performance in the to-be-reported quarter.
In the second quarter, the company made its Early Rider program, now called Trusted Tester, available to the public in downtown Phoenix.
Risks to Consider
Sluggishness in advertisement spending and the weakening momentum of YouTube are likely to have been headwinds.
The ongoing tension between Russia and Ukraine, which resulted in the suspension of advertisement activities in Russia, is expected to have been a major overhang for the company in the second quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Alphabet this time around. The combination of a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
Alphabet has an Earnings ESP of -0.03% and a Zacks Rank #3 at present.
Stocks to Consider
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their soon-to-be-reported quarterly results.
KLA Corporation
KLAC
has an Earnings ESP of +0.24% and a Zacks Rank of 3 at present. You can see
the complete list of today’s Zacks #1 Rank stocks here.
KLA is scheduled to release fourth-quarter fiscal 2022 results on Jul 28. The Zacks Consensus Estimate for KLAC’s earnings is pegged at $5.46 per share, suggesting an increase of 23.2% from the prior year’s reported figure.
Advanced Micro Devices
AMD
has an Earnings ESP of +2.14% and a Zacks Rank #3 at present.
Advanced Micro Devices is set to report second-quarter 2022 results on Aug 2. The Zacks Consensus Estimate for AMD’s earnings is pegged at $1.03 per share, which suggests an increase of 63.5% from the prior year’s reported figure.
Aspen Technology
AZPN
has an Earnings ESP of +1.40% and a Zacks Rank #2 at present.
Aspen Technology is set to report fourth-quarter fiscal 2022 results on Aug 8. The Zacks Consensus Estimate for ASPN’s earnings is pegged at $2.15 per share, which suggests an increase of 40.5% from the prior-year period’s reported figure.
Stay on top of upcoming earnings announcements with the
Zacks Earnings Calender
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