Alphabet 3Q Preview: Why It Should Be A Buy On Any Earnings Weakness


Reports Q3 2019 results on Monday, Oct. 28, after the close

* Revenue expectation: $40.3 billion

* EPS expectation: $12.28

For search-engine giant Google’s parent Alphabet (NASDAQ:GOOGL), it’s more important than ever to show investors that its growth generator remains intact at a time when it’s facing one of the most intense antitrust probes of our times.

And indeed, despite this uncertain regulatory environment, there is no sign that spending on digital advertising is weakening. For that reason, analysts expect 19% growth in Google’s sales to $40.3 billion in the third quarter, and about the same growth for the current fiscal year.

But the high level of scrutiny means that a slight miss in Alphabet’s revenue performance could cause a big negative move in its shares. Its stock closed on Friday at $1,264.30, having gained 13% this year. The shares have been under pressure for most of this year on concerns that higher spending could hurt the bottom-line.

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