With Q2 earnings now out the way, the stock looks pretty supported below. More fears of a recession could knock it lower, however.
Overview
Alphabet (NASDAQ: GOOG) released new earnings last week and despite expected turmoil amongst other tech stocks They were not terrible, however, Alphabet’s earnings missed analysts’ expectations, and many agreed that the results were better than feared given the unwelcoming macro advertising environment. Shares of Alphabet closed more than 7.6% Wednesday, a day after the company delivered better-than-feared earnings for the second quarter. Still, Alphabet stock is down 24% year to date.
Financials
The total market cap for Alphabet is $1.48tr, they posted earnings of $1.21 per share on $69.69 billion of revenue up 13% YoY, both slightly below consensus estimates, as growth slowed dramatically from last year. Revenue growth dipped to 13% from 62% a year earlier, and advertising revenue only increased 12%. YouTube advertising revenue rose only 5% after soaring 84% during the year-earlier period. The main revenue source for Alphabet is 'Search Engine' and its revenue stood at $40.69 billion. Alphabet reported a marginal 0.4% increase in profit to $19.45 billion in Q2'22 from $19.36 billion in Q2'21. The Earning Per Share (EPS) was $1.21, as compared to the street estimate of $1.28. Looking at the balance sheet they still remain strong with total cash and cash equivalents sitting at $124.97bn. Total assets amounted to $355.1bn, down $5bn since December 2021. Looking at the liabilities, total debts stood at $99.7bn, shrinking almost $7bn, which means overall, this is actually an improvement.
Technicals
After the recent 20 to 1 stock split on July first Alphabet stock is currently at $115.40. Following the trend of all tech-related stocks, this is lower than the 52-week high of $151.55. MACD reads negative at -0.15 and the RSI at 51.48 it is showing it as neither overbought nor oversold. A prominent resistance level has been established around $120 and support is consistently around the $105 level. This consolidation over the previous months which was just pricing in the possibility of poor earnings. Given that the earnings have now passed resistance still sit at $120 and until Alphabet can break this level, consolidation seems likely.
Summary
Overall, the stock looks promising, however, general economic outlooks for the USA and the economy are up in the air, but in comparison to other advertisement-based stocks like (NASDAQ:SNAP) which saw massive declines. Alphabet is a much safer and solid option.
