GOOGL – Given management’s confidence about their growth, product usage, and investments, market expectations are overly bearish, suggesting equity outperformance remains warranted

• Alphabet, Inc (GOOGL:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 22.1x Uniform P/E. At these levels, markets have bearish expectations for the firm, but given management’s confidence about their revenue growth, product usage, and long-term investments, market expectations are overly bearish, suggesting equity outperformance remains warranted  
  
  

• Specifically, management is confident remote work has provided some semblance of normalcy in the economy, that their coronavirus info panels have had 20 billion impressions, and that businesses are learning to adapt to coronavirus. Additionally, they are confident Google’s revenues were $41bn, up 15% in constant currency, and that YouTube revenue growth persisted until late Q1. Also, they are confident Network advertising revenues were $5.2bn, up 4% year-over-year, and that Google’s operating income was $9.3bn. Furthermore, they are confident consumers and businesses globally use their products daily and that they are continuing to invest in long-term growth