Alphabet: Color on Qtr
--> Shares of GOOG are down approx 5% in pre-market.
- Mizuho Securities is reiterating Buy rating as the core business remains healthy. Net revenue of $16.5b was slightly below consensus' $16.6b estimate. Non-GAAP EPS of $7.50 was below the Street's $7.96 est., but due to greater investment losses - adjusting for this, EPS would have been in-line. Alphabet impressively grew gross revenue (ex-FX) 23% YoY, operating income of $6.8b beat expectations of $6.7b and margins expanded YoY to 41.5%. Given continued runway in mobile search, YouTube, programmatic, and Cloud revenue, GOOGL remains firms #1 stock pick for 2016 Large Caps.
- Stifel Research notes Alphabet missed revenue growth targets / profitability estimates as the company continues to navigate the long-term transition to mobile, programmatic, and video advertising while simultaneously ramping up investments in its core and Other Bets businesses. Firm believes mobile monetization initiatives have a long runway and Alphabet's video / cloud initiatives may be in the midst of climbing an S-curve of growth.Reiterate Buy, $888 tgt.
- Needham Research notes Alphabet reported mixed 1Q16 results with revenue (ex-FX) exceeding expectations with 23% y/y growth, but higher TAC pushed operating income below expectations. Alphabet's core Google Websites continued to perform solidly and firm expects this trend to continue given the strong secular growth of mobile search and YouTube (video). However, Network revenue remains sluggish despite the strong growth in programmatic. While firm is modestly reducing estimates due to the slower Network growth and higher TAC, it continues to recommend Alphabet shares given its dominant market position and opportunities to reaccelerate growth and improve leverage.