Why Alphabet (GOOGL) is Poised to Beat Earnings Estimates Again

Core Insights - Alphabet (GOOGL) is positioned to potentially continue its earnings-beat streak in upcoming reports, having surpassed earnings estimates by an average of 20.26% in the last two quarters [1] Earnings Performance - For the most recent quarter, Alphabet reported earnings of $2.02 per share, which was a surprise of 39.11% compared to the expected $2.81 per share [2] - In the previous quarter, Alphabet's actual earnings were $2.15 per share, exceeding the consensus estimate of $2.12 per share by 1.42% [2] Earnings Estimates and Predictions - Estimates for Alphabet have been trending higher, influenced by its history of earnings surprises, and it currently has a positive Zacks Earnings ESP of +3.01% [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) indicates a strong possibility of another earnings beat [8] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7] Importance of Earnings ESP - The Earnings ESP metric is crucial for predicting earnings performance, as a negative value can reduce its predictive power, but does not necessarily indicate an earnings miss [8] - Companies often beat consensus EPS estimates for various reasons, and some may remain stable even if they miss the estimates [9]