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ALPHABET INC-CL C (NASDAQ:GOOG) – A Top Affordable Growth Pick with Strong Fundamentals

By Mill Chart

Last update: Jul 28, 2025

Investors looking for growth chances at fair prices often choose the "Affordable Growth" method, which finds companies with strong growth prospects that are not overpriced. This method picks stocks with a growth score above 7, good profitability and financial strength, and a valuation score above 5, making sure the company is priced fairly compared to its basics. ALPHABET INC-CL C (NASDAQ:GOOG) matches this profile, making it a strong pick for investors who want growth at a fair price.

Growth: A Major Factor for GOOG

The company’s Growth Rating of 7 shows its solid past and expected growth. Key points from the fundamental analysis report include:

  • Earnings Per Share (EPS) Growth: Over the last year, EPS rose by 67.29%, while the five-year average is 25.25% per year.
  • Revenue Growth: Revenue grew by 13.13% in the last year, with a five-year compound annual growth rate (CAGR) of 16.68%.
  • Future Expectations: Analysts predict EPS growth of 15.78% and revenue growth of 10.45% per year, showing continued progress.

While growth rates may slow slightly compared to the past, they stay above industry averages, keeping GOOG as a top growth choice.

Valuation: Fairly Priced Compared to Growth

Despite its strong growth, GOOG has a Valuation Rating of 6, meaning it is not too expensive. Key valuation numbers include:

  • Price/Earnings (P/E) Ratio: At 16.64, GOOG is below the industry average of 28.43 and the S&P 500’s 28.05, making it relatively cheap.
  • Forward P/E: Slightly higher at 18.49, it is still below the S&P 500’s 37.67, suggesting potential for gains.
  • PEG Ratio: The low PEG ratio (including earnings growth) shows the stock is fairly priced given its growth outlook.

These numbers fit the Affordable Growth method’s goal of finding companies where growth is not hidden by high prices.

Profitability and Financial Health: Solid Base

GOOG’s Profitability Rating of 9 and Health Rating of 8 add to its appeal:

  • High Margins: Operating margin is 33.53%, beating 95.71% of industry peers, while net profit margin is 31.12%.
  • Return Metrics: Return on Equity (ROE) of 31.85% and Return on Invested Capital (ROIC) of 25.81% show smart use of capital.
  • Financial Stability: A low debt-to-equity ratio of 0.07 and a strong Altman-Z score of 12.67 point to low risk of financial trouble.

These factors ensure GOOG’s growth is lasting and supported by a strong financial setup, which is key for long-term investors.

Why This Matters for Affordable Growth Investors

The Affordable Growth method focuses on companies that mix strong growth, fair prices, and solid finances. GOOG’s ability to deliver high profits, keep finances healthy, and grow at a good rate, while trading below broader market prices, makes it a top choice.

For investors who want to find similar options, more results from the Affordable Growth screen can be found here.

Disclaimer: This article is not investment advice. Always do your own research or talk to a financial advisor before making investment choices.