While other tech companies have faced Wall Street’s fury over a host of issues, Google’s parent Alphabet Inc. has largely weathered the storm, and analysts believe it will continue. to do so when releasing its results on Tuesday.
The search engine giant and advertising giant would be less vulnerable to
privacy changes to iOS versus Facebook from Meta Platforms Inc.
and other social media companies. Alphabet diversity
The companies are also making them less sensitive to macroeconomic factors such as inflation and the war in Ukraine that have put some tech brothers in trouble.
Alphabet’s numbers should underscore the company’s relatively healthy position in the online advertising firm after Snap Inc.
on Thursday reported a shortfall caused by an “upcoming operating environment” [that] could be even more difficult. and before Meta releases the results on Wednesday.
“In the short term, we are progressively constructive on Alphabet and Snap and slightly cautious on Meta and Pinterest,
Rohit Kulkarni of MKM Partners said in an April 14 note, summarizing Wall Street’s assessment of Alphabet.
Read more: Snap action rises despite shortfall in ‘challenging operating environment’
A digital advertising expert consulted by Cowen analyst John Blackledge has “positive expectations” for the first quarter, Blackledge said in an April 13 note that reiterates an outperform rating and price target of 3,300. $.
The advertising expert pointed to the acceleration of Google Shopping, helped by a slight increase in cost per click and impression growth, as well as strong click growth in Google Search. Google Search remains a “good option” for brands making money from certain social media due to privacy changes imposed by Apple Inc.
in how advertisers track customers.
Cowen’s advertising survey highlighted the potential risk to YouTube’s mobile viewing amid the rise of TikTok, particularly among 18-24 year old demos. YouTube topped all platforms in the first quarter of 2022, when respondents were asked which platform they “most often” use for mobile video. But YouTube fell to 35% of respondents from 45% in the first quarter of 2021 and TikTok jumped to 22%.
What to expect
Gain: Analysts on average expect Alphabet to report earnings of $25.60 per share, up from $22.30 per share a year ago. Analysts were expecting $25.04 per share at the end of December.
Contributors to Estimize — a crowdsourcing platform that collects estimates from Wall Street analysts as well as buy-side analysts, fund managers, corporate executives, academics and others — predict earnings $26.69 per share on average.
Revenue: Analysts on average expect Alphabet to report total revenue of $68.05 billion in the first quarter and $56.06 billion after removing traffic acquisition costs, up from $46.43 billion. billion ex-TAC a year ago. Estimate contributors also forecast $57.89 billion in ex-TAC revenue.
Movement of stocks: Alphabet’s stock is down 17% year-to-date, while the S&P 500 index
fell 10%. Alphabet shares are down 8% since the company announced its fourth quarter results on Feb. 1.
What analysts say
The state of advertising – while potentially problematic for Facebook due to annual slowdowns around the world and in the US (9% to 11%) – should not pose a threat to Alphabet, according to analyst Kulkarni.
Google generally fared better with higher-than-expected prices, driven by higher offline traffic and a shift to travel that drove up overall search prices, said James Lee, an analyst at Mizuho Securities, in a rating from April 17 that maintains a Buy rating and a price target of $3,600.
Lee, who recently hosted an investor call on Google advertising with a leading ad agency, concluded that advertisers aren’t seeing a slowdown in consumer demand despite inflationary pressures. Additionally, Lee expects a shift to service industries such as travel in favor of Google.