Buy the Dip in Alphabet (GOOGL) Stock as Q1 Earnings Approach?

Core Viewpoint - Alphabet's upcoming Q1 earnings report is highly anticipated amid ongoing antitrust pressures and a significant decline in stock price, raising questions about potential investment opportunities [2][4]. Group 1: Financial Performance Expectations - Alphabet's Q1 sales are projected to reach $75.53 billion, reflecting a 12$67.59 billion in the same quarter last year [4]. - The expected Q1 EPS is $2.01, a 6$1.89 per share a year ago [4]. - Alphabet has consistently exceeded EPS expectations for eight consecutive quarters, with an average earnings surprise of 11.57% in the last four quarters [4][5]. Group 2: Stock Valuation and Market Position - Alphabet currently has the lowest P/E valuation among the "Magnificent 7" tech stocks, trading at a forward earnings multiple of 16.9X, compared to the S&P 500's 19.8X [6]. - The next lowest P/E valuation in the group is Meta Platforms at 19.9X, while Tesla has the highest at 87X [6]. Group 3: Analyst Recommendations and Price Targets - The average price target for Alphabet stock is $202.06, indicating a potential upside of 37% from current levels [8]. - Alphabet has an average brokerage recommendation (ABR) of 1.40, suggesting a "Strong Buy" sentiment based on 53 brokerage firms [9][10]. - The number of "Strong Buy" recommendations has increased from 36 to 41 over the past three months, indicating growing confidence among analysts [10]. Group 4: Future Outlook and Risks - The upcoming Q1 report is critical, as further declines in EPS revisions could lead to a sell rating, while positive revisions may prompt a buy rating [11]. - Despite current challenges, Alphabet's EPS outlook remains attractive, although earnings estimate revisions for fiscal 2025 and FY26 have trended downward [11].