Google’ parent company Alphabet is set to release its second-quarter financial results on Tuesday July 26, following the anticipated 20-to-one stock split executed on July 15.
Stock splits might not fundamentally change a company’s overlyings, but a more accessible per-share price combined with strong quarterly earnings could encourage a reversal.
As per the wider tech-stock market, GOOGL has fallen in 2022, although year-to-date losses of 23% are largely in line with broader NASDAQ trends.
However, analysts aren’t overly enthusiastic this tech earnings season, and recent results have rendered this opinion justified.
Snap, parent company of the Snapchat social media app, fell a savage 40% on Friday after quarterly results disappointed investors.
Twitter and Netflix didn’t fare as bad, but their respective earnings were certainly nothing to write home about.
But Alphabet has one ace up its sleeve leading up to tomorrow’s earnings: Google Cloud.
Following a major partnership agreement with Europe’s largest telecoms company Deutsche Telecom, Google Cloud could be the hero Google needs in an underwhelming earnings season.
From the forecasters
CNN’s poll of 47 investment analysts produced a 12-month price target of US$147, representing a 36.5% increase.
Earnings per share (EPS) results are expected to come in at US$1.27, compared to first-quarter results of US$1.23, while total sales could tip the US$70bln mark.
Exceeding EPS expectations would represent a return to form for GOOGL stock; up until the last quarter, earnings outperformed Street expectations seven quarters in a row.
Overall, sentiment is firmly in the buy region among the analysts in the lead up to tomorrow’s earnings.