Technology

What Analysts Are Saying About Alphabet After Earnings

Chris Lange

Published: February 5, 2019 12:20 pm

Last Updated: January 31, 2020 1:00 am

Alphabet Inc. (NASDAQ: GOOGL) reported fourth-quarter and full-year 2018 results after markets closed Monday. Overall the reaction from investors was not super impressive, despite an incredible beat on the bottom line and significant revenue growth from last year. Most analysts that have come out after earnings seem to be staying in their lane as well.

24/7 Wall St. has included some highlights from the earnings report, as well as what analysts said about Alphabet afterward.

The search engine behemoth reported diluted earnings per share (EPS) of $12.77 on revenues of $39.28 billion. In the year-ago quarter, Alphabet posted a net loss per share of $4.35 on revenues of $32.32 billion. Analysts were estimating EPS of $10.86 on revenues of $38.98 billion.

The Google segment posted fourth-quarter revenues of $39.12 billion, up from $32.19 billion a year ago. Operating income rose from $8.6 billion to $9.7 billion. The operating loss on Other Bets totaled $1.33 billion, up from $748 million in the year-ago quarter. For the full year, Other Bets revenue rose from $2.73 billion to $3.36 billion. Reconciling items, including European Commission fines among other items, doubled from $3.41 billion to $6.84 billion.

In the fourth quarter, year-over-year traffic acquisition costs paid to Google Network members fell by about four percentage points to 70% of Network revenues, or $3.93 billion. Payments to distribution partners totaled $3.51 billion, about 23% of websites revenues. Total traffic acquisition costs rose from $6.45 billion to $7.44 billion.

Paid clicks on Google websites were up 66% year over year and up 22% sequentially. Aggregate cost per click fell 29% compared with the year-ago quarter and was down 9% sequentially.

Here’s what the first round of analysts had to say after earnings:

• SunTrust Banks maintained a Buy rating with a $1,350 price target.
• Credit Suisse reiterated it as Outperform but lowered its target to $1,400 from $1,450.
• BMO Capital Markets reiterated a Market Perform rating with a $1,100 target.
• Citigroup reiterated a Buy rating.
• Nomura reiterated a Buy rating.
• Barclays reiterated an Overweight rating.
• RBC maintained an Outperform rating with a $1,300 price target.

Shares of Alphabet were last seen down about 1% at $1132.18 on Tuesday, in a 52-week range of $977.66 to $1291.44. The consensus analyst price target is $1351.27.