Shares of Alphabet (GOOGL) gained in after-hours trading after the tech titan reported its Q1 results. Earnings per share came in at $2.81, which beat analysts’ consensus estimate of $2.01 per share. Revenue climbed 12.1% to $90.23 billion, beating expectations of $89.18 billion.
Furthermore, Google Cloud grew from $9.57 billion to $12.26 billion year-over-year, which was basically in line with analysts’ expectations of $12.27 billion. However, YouTube advertising revenue missed estimates after coming in at $8.93 billion. For reference, Wall Street was anticipating $8.97 billion. Interestingly, Google’s more predictable cloud revenue has been steadily growing over the years to surpass YouTube’s more volatile ad revenue, according to Main Street Data.
At the same time, its cloud operating margin has been increasing and is now generating solid profits compared to the deep losses the segment saw in previous years, as pictured below.
In addition, Alphabet’s revenues for its other segments were as follows:
- Google Search and other: $50.7B (up 9.8%)
- Google Network: $7.26B (down 2.1%)
- Google subscriptions, platforms, and devices: $10.38B (up 18.8%)
- Other Bets: $450M (down 9.1%)
Are Google Shares a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GOOGL stock based on 27 Buys, 10 Holds, and zero Sells assigned in the past three months. Furthermore, the average GOOGL price target of $195.09 per share implies 22.6% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
