Google (NASDAQ:GOOGL) posted adjusted EPS of $2.15 in Q4, beating street estimates of $2.13. The company has beat earnings estimates in each of the last 8 quarters.
Although earnings results came in above estimates by the smallest of margins, at 0.9%. Well below the 8 quarter average of 8.6%.
Earnings growth has slowed since Q1 2024, but remains at a solid 30%+ range over the last 3 quarters.
Sales minus traffic acquisition costs came in at $81.621 billion for the quarter, which was just barely above street estimates of $81.6 billion. The company has beaten sales expectations for the last 8 quarters as well.
Similar to the earnings beat, the sales beat was also the smallest in the last 8 quarters.
While the sales growth rate remains in the mid teens.
The stock gapped down about 8% after earnings after they guided for capital expenditures of $75 billion for 2025, which was more than the street was anticipating. The CAPEX spend will have a negative effect on earnings.
The street is expecting about 14% EPS growth (down from the 30%+ over the last few quarters) and 12% sales growth over the next 4 quarters, slightly more than the S&P 500 market average. The forward PE is now 21.5x, while the price to growth ratio is about 1.5. Not bad relative to the rest of the “mag” stocks.
In the chart above we can see that the stock is currently holding its 50 day moving average, which coincides with the two prior swing lows in the area of $181.50. Resistance above will now be the $201 level and of course the open price gap left behind prior to earnings. There is a rising trend line (red line) on the long term chart that could come into play if the short term momentum keeps pushing price lower.