A man walks past the logo of the US multinational technology company Google during the VivaTech … [+]
Alphabet (Google) (NASDAQ: GOOG) is scheduled to report its fiscal Q2 2021 results on Tuesday, July 27. We expect GOOG to beat the consensus estimates for revenues but miss for earnings. The company has reported better than expected revenues and earnings figures in each of the last four quarters. In the first quarter the company’s revenue growth was led by YouTube Ads segment and Google Cloud segment. Google Search continued to see a steady growth. We expect the same to drive the second-quarter FY2021 results, as well. Our forecast indicates that Google’s valuation is around $2693 per share, which is 3% above the current market price of $2622. Look at our interactive dashboard analysis on Google’s pre-earnings: What To Expect in Q2? for more details.
(1) Revenues expected to be ahead of consensus estimates in Q2
Trefis estimates GOOG’s fiscal Q2 2021 revenues to be around $60.16 billion, 7% above the $56 billion consensus estimate. GOOG’s revenue growth was led by the cloud segment since the start of the pandemic while Google Search segment has recovered its growth in the last few quarters. We expect the momentum generated over the last couple of quarters to continue in the second quarter of FY2021. Overall, we expect revenue of around $235.8 billion in FY2021. Our dashboard on Google’s revenues offers more details on the company’s segments.
(2) EPS likely to miss the consensus estimates
GOOG’s Q2 2021 earnings per share is expected to be $17.52 per Trefis analysis, below the consensus estimate of $19.14. The company’s net income margin rose slightly in 2020 and is expected to fall slightly in 2021. Altogether, the company is likely to report an EPS of around $71.69 in FY2021.
Revenue
(3) Stock price estimate 3% above the current market price
Going by our Google’s valuation, with an EPS estimate of around $71.69 and a P/E multiple of 37.6x in fiscal 2021, translates into a price of $2693, which is 3% above the current market price of $2622.
Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year
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