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

Outside of Tesla TSLA, Wall Street will be paying close attention to Alphabet’s GOOGL quarterly results this week, with the tech behemoth set to release its Q1 report on Thursday, April 24th.Mounting antitrust pressures have weighed on Alphabet stock as a call to potentially break up Google’s search engine business has led to lower investor sentiment amid broader economic concerns. Furthermore, monopoly concerns regarding Alphabet’s dominance in the online advertising market have extended the selloff, with GOOGL shares down 20% year to date.That said, Alphabet stock is still sitting on +40% gains over the last two years, making it a worthy topic of if now is a good time to buy the dip.  Image Source: Zacks Investment Research Alphabet’s Q1 Expectations Optimistically, Alphabet’s Q1 sales are expected at $75.53 billion, a 12% increase from $67.59 billion in the comparative quarter. On the bottom line, Q1 EPS is expected to be up 6% to $2.01 compared to $1.89 per share a year ago. Alphabet has exceeded the Zacks EPS Consensus for eight consecutive quarters with an average earnings surprise of 11.57% in its last four quarterly reports.Image Source: Zacks Investment Research Cheapest P/E Valuation Among the Mag 7       Most appealing about Alphabet stock at the moment is that GOOGL has the cheapest P/E valuation among the "Magnificent 7" big tech stocks. Trading around $150, GOOGL is at a 16.9X forward earnings multiple, a noticeable discount to the benchmark S&P 500’s 19.8X.Notably, the next cheapest P/E valuation among the Mag 7 is Meta Platforms META at 19.9X forward earnings, with Tesla's 87X the highest among the group. Image Source: Zacks Investment Research GOOGL Price Target & Broker Recommendations Based on short-term price targets offered by 48 analysts, the Average Zacks Price Target for Alphabet stock is $202.06, which suggests 37% upside from current levels. Image Source: Zacks Investment ResearchAlthough the average brokerage recommendation (ABR) shouldn’t be confused with the Zack Rank, GOOGL has an ABR of 1.40 on a scale of 1 to 5 (Strong Buy to Strong Sell) which is based on the recommendations of 53 brokerage firms.Image Source: Zacks Investment Research Conclusion & Final Thoughts While the downside risk is starting to look priced in, Alphabet stock currently lands a Zack Rank #3 (Hold). To that point, Alphabet’s EPS outlook is still attractive, but earnings estimate revisions have trended down for fiscal 2025 and FY26.Considering such, Alphabet’s Q1 report will be critical as a further decline in EPS revisions could lead to a sell rating, but of course, an uptick may lead to a buy rating with GOOGL trading at its cheapest forward P/E valuation in the last decade.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphabet Inc. (GOOGL): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks