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It's been a good week for Alphabet Inc. (NASDAQ:GOOGL) shareholders, because the company has just released its latest first-quarter results, and the shares gained 9.7% to US$162. Revenues were US$90b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$2.81, an impressive 40% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Alphabet's 54 analysts is for revenues of US$386.3b in 2025. This would reflect a modest 7.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 3.5% to US$9.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$388.0b and earnings per share (EPS) of US$8.88 in 2025. So the consensus seems to have become somewhat more optimistic on Alphabet's earnings potential following these results.
View our latest analysis for Alphabet
There's been no major changes to the consensus price target of US$203, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Alphabet analyst has a price target of US$240 per share, while the most pessimistic values it at US$160. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Alphabet shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alphabet's past performance and to peers in the same industry. We would highlight that Alphabet's revenue growth is expected to slow, with the forecast 10.0% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10.0% annually. So it's pretty clear that, while Alphabet's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.