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Should You Buy Alphabet Stock Before Its Earnings Report?

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Google parent Alphabet is gearing up to report its earnings for the third quarter, which ended in September 2020. Alphabet has scheduled to release its earnings on Oct. 29 at 4.30 p.m. ET, according to its investor relations website. What is in the cards as Alphabet reports earnings? Should you buy the stock before the earnings report?

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Alphabet's earnings estimates

The consensus estimates call for Alphabet to report an EPS of $11.25 on revenue of $42.8 billion. In the third quarter of 2019, Alphabet reported revenue of $40.5 billion, which beat the consensus estimate at $40.3 billion. However, the company's EPS of $10.12 missed the consensus estimate at $12.32. 

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Source: Pixabay
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What is Google's stock price today?

Alphabet stock comes in two types—Class A and Class C. The Class A stock trades under the ticker symbol "GOOGL" and holders have voting rights. In contrast, Alphabet’s Class C shares trade under the ticker symbol "GOOG" and holders don't have any voting rights. Alphabet’s Class A and Class C stocks have slightly different prices.

GOOGL stock fell 0.64 percent in the pre-market session on Thursday, Oct. 22 to trade at $1,575.83. The stock jumped 2.25 percent on Oct. 21 and finished at $1,585.99. GOOG stock fell 0.52 percent in the pre-market session on Oct. 22 to trade at $1,585. The stock jumped 2.40 percent on Oct. 21 and closed at $1,593.31.

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What to expect from Alphabet stock

The most bullish analyst predicts 27 percent upside potential for both GOOGL and GOOG stock types to $2,020 in 12 months. On the other hand, the most bearish analyst predicts 22 percent downside for both GOOGL and GOOG stocks to $1,237.

Is Alphabet stock right for your portfolio? Investors seeking broad exposure to the technology sector may find Alphabet stock ideal. For example, Alphabet’s Google is the leading provider of online advertising services—a market that keeps expanding. Google is also one of the top cloud computing companies. The COVID-19 pandemic has boosted the demand for cloud services and Google is enjoying the growth. The cloud market is expanding rapidly. Amazon's earnings show that it's a very profitable business

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Since Alphabet owns Waymo, the stock gives investors exposure to self-driving and ride-hailing, which both have bright futures. For anyone who can't invest directly in Elon Musk’s space travel company, SpaceX, Alphabet stock offers an alternative path to get exposure to the company.

Does Google stock pay dividends?

Currently, Alphabet doesn’t pay dividends. The company makes huge profits and finished the second quarter with more than $120 billion in cash. However, Alphabet prefers to reinvest the profits in its business to drive future growth instead of distributing it to shareholders as a dividend. 

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