Alphabet Stock Analysis (NASDAQ:GOOGL)
Alphabet Analysis Video
Our Alphabet stock analysis is based on a detailed research of the company, its financials, innovations, and future prospects. Alphabet Inc. is a holding company. The Company holds interests in Google Inc. (Google). Alphabet was created as a subsidiary directly owned by Google Inc. The restructuring process was completed on October 2, 2015. Alphabet stock analysis shows that not only has the firm been at the forefront of innovation, but has been a great value stock as well.
Alphabet Inc Stock Rating (4.1/5)
Should you buy GOOGL stock?
- The Year Over Year (YoY) revenue growth for Alphabet was 22.2% in 2016 Q4.
- Alphabet's average operating margin of 26.3% was exceptional.
- LTM Net margins were good at 21.6% for Alphabet.
- With a debt/equity ratio of 0.03, Alphabet is comparatively less leveraged than its peers in the Computer and Technology sector.
- The company has an operating cash flow which is 1.8 times the net income. We see this as a positive signal.
- Alphabet's return on invested capital of 31.6% is good.
- The LTM ROE of 15.1% for Alphabet is attractive.
- Alphabet has a healthy FCF (Free Cash Flow) margin of 24.4%.
Should you sell GOOGL stock?
- The company is trading at a price to sales multiple of 6.5, which is overvalued in comparison to the Internet Services industry average multiple of 2.5.
Financial analysis of Alphabet along with a look at the company's growth, core business, its new ventures etc. makes one see the value of this tech stock. The company has repeatedly innovated, made strategic acquisitions, and has a huge portfolio of patents. All this and growing Alphabet assets makes us bullish about the stock. The stock has seen a steady rise in price as can be seen from Alphabet stock price history.
Alphabet Inc. (marketed as Alphabet) is an American multinational conglomerate founded on October 2, 2015, by the two founders of Google, Larry Page and Sergey Brin, with Page serving as CEO and Brin as President. It is the parent company of Google, Calico, GV, Google Capital, Verily, X,Google Fiber and several other companies previously owned by them. The Company offers advertising solutions for businesses with a range of products across screens and devices. It delivers performance advertising and brand advertising. Its performance advertising lets its advertisers connect with users. It offers AdWords, which is an auction-based advertising program that helps to create text-based advertisements that appear on Google Websites and the Websites of Google Network Members using its advertising programs to deliver relevant advertisements together with their search results and content. Its performance advertising also includes AdSense program to deliver relevant advertisements. Google Adwords the main source of revenue for the company, with Alphabet revenue. It invested in the future early on by acquiring Android Inc. in 2005 and the video streaming company YouTube in 2006. Both have paid off with YouTube contributing significantly to revenues. To strengthen its ad serving platform, the company brought DoubleClick in 2007, and went on to buy mobile display ad technology provider AdMob in 2009. To supercharge its Android division and enhance competition, the company acquired Motorola Mobility. However, it eventually sold this loss making unit to Lenovo, while keeping the majority of its patents.
The latest innovations include Daydream for Virtual Reality which will involve Daydream-ready smartphones, a VR headset with small handheld controller and Daydream apps, driverless cars which are operated by software called Google Chauffeur, Google Home and Google Assistant that features artificial intelligence and advanced Internet of Things smart home capabilities. The Other Bets segment is engaged in the sale of Nest hardware products, Internet and television services through Google Fiber, and licensing and research and development (R&D) services through Verily. Google offers products, including Gmail, which is an e-mail service; Chrome, which is a browser, and Google Play, which allows access to movies, books, music and application on various devices. Google offers platforms, including Chrome OS and Android mobile operating system.
With our Alphabet market analysis, we compare Alphabet valuations with its industry peers like Yahoo, Facebook and Microsoft. Alphabet ratio analysis involves PE ratio (see Alphabet PE ratio chart), PS ratio comparison with industry peers.