Alphabet Beats Expectations in Q4: Why it Might Not Be Enough to Send the Stock Up

Alphabet Inc (NASDAQ:GOOG) released its fourth-quarter results on Monday. The company’s revenues hit $39.28 billion for the quarter, which came in at slightly above estimates of $38.93 billion. Earnings per share of $12.77, however, were well above the expected $10.82 that analysts had been projecting. Despite the earnings beat, the stock was down in after-hours trading as it simply wasn’t enough for investors to hit the buy button.

There was a bit of apprehension from buyers as it wasn’t all good news for Google in its earnings report. Its operating margin of 21% for the quarter was noticeably down from 24% in the prior year. In addition, revenue growth was also lower than it was a year ago.

But overall, it was a good quarter from Google and the problem is that sometimes investors can nitpick at a number or two that wasn’t quite perfect and sell due to that. However, with a stock that’s trading at significant multiples to book value and earnings, investors are going to be expecting a lot in order to continue justifying the stock’s hefty premium.

In the past year, Google’s share price has struggled, producing flat returns for investors over the past 12 months. And unfortunately, these results, while strong, might not be enough to generate the excitement needed to start a rally.

When it comes to high-growth stocks, the top line is what matters. And with Google narrowly beating out expectations, it may not have done enough to convince investors it’s firing on all cylinders.