GOOGL Gets Beating After Alphabet Revenue Bust

The dip comes after GOOGL hit record highs yesterday

Deputy Editor
Apr 30, 2019 at 10:42 AM
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Google parent Alphabet Inc's (NASDAQ:GOOGL) highly anticipated first-quarter earnings were released after the close last night, with mixed results. The FAANG name posted a better-than-expected adjusted profit, but revenue that fell below estimates. In a subsequent conference call, Chief Financial Officer Ruth Porat said the rare revenue miss was due to competition, currency fluctuations, and changes at YouTube, though details on the latter were not given. 

Today's disappointment has GOOGL pulling back from yesterday's record high of $1,296.97. The stock is now down 7.7% at $1,195.69 -- pacing for its worst day since October 2012. Plus, the equity is trading south of its 40-day moving average for the first time in three months, and is back near its early April levels. 

The dip in GOOGL stock comes just after the security veered into overbought territory late last week, with its 14-day Relative Strength Index (RSI) closing at 77 on Monday. Short-term options traders have been more put-skewed than usual, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.14, which registers in the 99th annual percentile. Plus, today's options traders are bombarding the stock, with roughly 68,000 contracts already exchanging hands -- eight times the average intraday volume. 

Analysts have jumped on Alphabet, too, with at least nine slashing their price targets -- including Morgan Stanley to $1,425 from $1,500, and Cowen and Company to $1,400 from $1,420 -- as well as a downgrade from Stifel to "hold" from "buy." J.P. Morgan Securities, however, has acted as the outlier, with a price-target lift to $1,310 from $1,250. Despite the onslaught of price-target cuts, the consensus 12-month target price is still at a 13.3% premium to current levels. 

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