Up by 18% year to date, Alphabet Google is beginning to recover from one of its biggest crashes on record.
Google also has earnings coming out this week Tuesday April 25th after the bell.
In this video we will answer the questions:
- Should You Invest In GOOGLE?
- What Are GOOGL’s Earnings Expectations?
- How To Place An Earnings Option Trade In GOOGL (Showing a real example on the option trading platform)
Hey guys, Darren here. Thanks for watching. We talk about action steps you can take today to increase profits and reduce risks in your portfolios by trading options.
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DISCLAIMER, I am not a financial planner and I am not recommending trades. Please do your own research and if you are new or learning options, I recommend you start small.
Should You Invest In Google?
Should we be long or short Google? Let’s look at what they do, how they have performed, the fundamentals, technicals and outlook in general going forward.
GOOGLE Fundamentals
GOOGL fundamentals are great.
The PE ratio is currently near the lowest it has ever been at 22. The expected 1 year price target is 124 so an 18% increase from where it is today. Not too bad.
They have a 26% Operating Profit Margin, $113B in cash and only $11B in debt.
So the fundamentals are great.
Alphabet owns the world’s two most popular websites, Google and YouTube.
Google commands an 85% share of the global search engine market, and YouTube has over 2 billion monthly active users.
Of course, these services are mostly free, so how does Alphabet make money? By showing advertisements to people browsing those services and others that it offers to customers. By selling to advertisers to appear on these services, Alphabet increased revenue from $66 billion in 2014 to $283 billion in 2022.
GOOGLE Technical Charts
In looking at the chart on tradingview you can see that Google has been trending upwards. However it is 30% off it’s highs.
Current Market Situation For GOOGLE
There are mounting economic concerns weighing on the market right now. Many people think we are entering a recessionary period.
The one potential concern is that ad sales are affected by the broader economy, so Alphabet’s profitability is somewhat affected by the current market downturn. Marketers are more cautious about spending money on advertising now that economies worldwide have slowed in response to Central Banks raising interest rates and the war in Ukraine.
What Are GOOGL’s Earnings Expectations?
The consensus estimate for earnings on April 25th is $1.05 per share. They missed the last 4 quarters as you can see on Marketbeat. However they actually did $1.05 last quarter.
I expect a Q1 beat. However whether that happens or not, depending on guidance and other factors there is no guarantee which way the stock price will move.
However, with GOOGL continuing to be a dominant player with a lucrative business model and at low current price I’m bullish on GOOGL.
How To Sell A PUT Vertical Spread Earnings Option Trade In GOOGL (Showing a real example on the option trading platform)
Let’s go to the Tastytrade trade platform. It’s the best platform for trading options. I’ll put a link down below.
We go to the trade tab and punch in GOOGL in the upper left.https://start.tastytrade.com/#/login?referralCode=MB9KEHV4RK
We pick the May 19 option chain.
Now we click on the Bid to sell the 105 Put and Ask to Buy the 95 Put and collect $2.84.
We switch to the CURVE mode by clicking on Curve and can see our profit zone in green.
We collect $284 upfront for selling this Put Vertical Spread. As long as the stock price stays above the 105 strike price in the next 26 days we keep the entire $284.
Worst case if GOOGL moves down then we roll to the next option cycle and collect additional premium. So our profits are just delayed a little.
Alright guys, I’ve put a link down below for the FREE Options Workshop. Be sure to grab that.
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