Alphabet Inc. (GOOGL) Stock: Here’s Why It’s Declining

Rand Capital Corporation RAND Stock News

Alphabet Inc. (GOOGL) is headed up in the market in today’s trading session. The company, focused on the tech sector, is presently trading at $1198.96 after tumbling -7.50% so far in today’s session. When it comes to tech stocks, there are several aspects that have the potential to cause declines in the market. News tends to be one of the biggest reasons for the movement. Here are the recent headlines relating to GOOGL:

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May-01-19 03:10AM Edited Transcript of GOOGL earnings conference call or presentation 29-Apr-19 8:30pm GMT
01:53AM FirstFT: Todays top stories
01:00AM How Powerful Was "Avengers: Endgame" for Disney?
12:28AM Asia markets mostly closed, Sydney up after new S&P 500 high
Apr-30-19 09:09PM In streaming wars, Apple says it can coexist with Netflix

Nonetheless, any time investors are making a decision to invest, prospective investors should look at much more than just news, this is especially the case in the ever evolving tech space. Here’s what’s happening in regard to Alphabet Inc..

How GOOGL Has Been Trending

Although a single session decline, like the fall that we’re seeing from Alphabet Inc. may make some investors upset, a single session fall alone shouldn’t be the reason for a decision to, or not to, buy a company’s stock. It’s generally a good idea to look into trends experienced by the stock for a period longer than a single session. In the case of GOOGL, below are the returns on investment that investors have seen:

  • Past 5 Trading Sessions – Over the last 7 days, GOOGL has generated a change in price that amounts to -5.64%.
  • Past 30 Days – The monthly returns from Alphabet Inc. has been 1.88%.
  • Quarterly – Throughout the past 3 months, the stock has generated a ROI of 12.05%
  • Past 6 Months – Throughout the last six months, investors have seen a change that works out to 8.64% from the stock.
  • YTD – Since the open of this year GOOGL has produced a return on investment of 14.74%.
  • Annually – Lastly, over the last full year, we’ve seen a change in the amount of 16.24% from GOOGL. In this period of time, the stock has traded at a high price of -7.56% and a low price of 22.64%.

Ratios To Watch

Looking at a few key ratios associated with a stock can provide prospective investors an understanding of just how risky and/or rewarding a pick might be. Below are some of the key ratios to consider when looking at GOOGL.

Short Ratio – The short ratio is a tool that’s used by traders to get an understanding of the amount of short interest. The higher this ratio, the more investors believe that the value of the stock is going to tumble. Throughout the sector, strong tech stocks tend to come with a lower short ratio. On the other hand, we also see a lot of short squeezes in the space. Nonetheless, as it relates to Alphabet Inc., the stock’s short ratio comes to 0.97.

Quick & Current Ratios – The quick and current ratios are tools that are used to get an idea of the company’s liquidity. Essentially, they measure the company’s abilities to pay its debts when they mature with only current assets or quick assets. Because in tech, several companies are heavily reliant on the continuation of investor support as they work to bring new technologies to market, the quick and current ratios can look bad. However, some better companies in the tech industry come with good quick and current ratios. When it comes to GOOGL, the quick and current ratios come to 3.90 and 3.90 respectively.  

Book To Share Value – The book to share value ratio compares the the price of shares to the current book value of assets that are owned by the company. In this case, that ratio equates to 255.49.

Cash To Share Value – Finally, the cash to share value comparison compares the total cash on hand to the price of the company’s stock. As it relates to GOOGL, the cash to share value ratio is 158.49.

Big Money And Alphabet Inc.

One thing that I have learned in my brief time alive, or somewhat alive has been that smart money tends to follow the moves made by big money players. Usually, investors that are looking to keep the risk down will pay close attention to moves made by institutions and those on the inside. So, where is the big money as it relates to GOOGL? Here’s what’s going on:

  • Institutions – As it stands now, institutions hold 81.10% of the company. On the other hand, it is important to note that the ownership held by institutions has seen a move of 0.10% in the last quarter.
  • Insiders – as it relates to insiders, those close to the company currently hold 0.16% of Alphabet Inc.. Their ownership of the company has changed by 0.00% over the past quarter.

Analyst Opinions With Regard To Alphabet Inc.

Although it’s not a good idea to unknowingly follow the opinions of analysts, it is a smart idea to consider their thoughts when validating your own opinions before making investment decisions in the tech space. Here are the recent moves that we have seen from analysts with regard to GOOGL.

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Jan-07-19 Upgrade Pivotal Research Group Hold → Buy $1240
Jan-03-19 Upgrade Canaccord Genuity Hold → Buy $1140 → $1250
Dec-06-18 Initiated Guggenheim Buy $1330
Nov-26-18 Reiterated MKM Partners Buy $1465 → $1365
Oct-26-18 Reiterated Monness Crespi & Hardt Buy $1415 → $1315

What We’ve Seen In earnings results

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $54.74. In the current quarter, analysts see the company producing earnings in the amount of $10.60. Over the last 5 years, GOOGL has generated revenue in the amount of $19.80% with earnings coming in at 19.60%. On a quarter over quarter basis, earnings have seen movement of 30.30% and revenue has seen movement of 21.50%.

What’s Going On With Share Counts?

Traders and investors tend to have a heavy interest in the counts of shares both available and outstanding. As it relates to Alphabet Inc., there are currently 688.64M with a float of 647.91M. These data mean that of the total of 688.64M shares of GOOGL currently in existence today, 647.91M are available to trade hands on the market.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to GOOGL, the short percent of the float is 0.24%.

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