Don't overlook NASDAQ:GOOGL—a stock with solid growth prospects and a reasonable valuation.

Discover ALPHABET INC-CL A (NASDAQ:GOOGL), an undervalued growth gem identified by our stock screener. NASDAQ:GOOGL is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Unpacking NASDAQ:GOOGL's Growth Rating

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:GOOGL scores a 7 out of 10:

• GOOGL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 45.21%, which is quite impressive.
• Measured over the past years, GOOGL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 19.55% on average per year.
• Looking at the last year, GOOGL shows a quite strong growth in Revenue. The Revenue has grown by 11.78% in the last year.
• GOOGL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.57% yearly.
• GOOGL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.96% yearly.
• The Revenue is expected to grow by 10.62% on average over the next years. This is quite good.

ChartMill's Evaluation of Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:GOOGL was assigned a score of 5 for valuation:

• 73.13% of the companies in the same industry are more expensive than GOOGL, based on the Price/Earnings ratio.
• 68.66% of the companies in the same industry are more expensive than GOOGL, based on the Price/Forward Earnings ratio.
• 70.15% of the companies in the same industry are more expensive than GOOGL, based on the Enterprise Value to EBITDA ratio.
• Based on the Price/Free Cash Flow ratio, GOOGL is valued a bit cheaper than 65.67% of the companies in the same industry.
• GOOGL has an outstanding profitability rating, which may justify a higher PE ratio.
• GOOGL's earnings are expected to grow with 16.71% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for NASDAQ:GOOGL

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:GOOGL has earned a 8 out of 10:

• GOOGL has an Altman-Z score of 13.45. This indicates that GOOGL is financially healthy and has little risk of bankruptcy at the moment.
• GOOGL has a better Altman-Z score (13.45) than 92.54% of its industry peers.
• GOOGL has a debt to FCF ratio of 0.20. This is a very positive value and a sign of high solvency as it would only need 0.20 years to pay back of all of its debts.
• GOOGL's Debt to FCF ratio of 0.20 is amongst the best of the industry. GOOGL outperforms 86.57% of its industry peers.
• A Debt/Equity ratio of 0.05 indicates that GOOGL is not too dependend on debt financing.
• A Current Ratio of 2.15 indicates that GOOGL has no problem at all paying its short term obligations.
• GOOGL has a Quick Ratio of 2.15. This indicates that GOOGL is financially healthy and has no problem in meeting its short term obligations.

Evaluating Profitability: NASDAQ:GOOGL

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:GOOGL has earned a 9 out of 10:

• GOOGL has a better Return On Assets (20.23%) than 95.52% of its industry peers.
• The Return On Equity of GOOGL (28.14%) is better than 94.03% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 24.32%, GOOGL belongs to the top of the industry, outperforming 98.51% of the companies in the same industry.
• GOOGL had an Average Return On Invested Capital over the past 3 years of 22.54%. This is significantly above the industry average of 9.68%.
• The last Return On Invested Capital (24.32%) for GOOGL is above the 3 year average (22.54%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 25.90%, GOOGL belongs to the top of the industry, outperforming 92.54% of the companies in the same industry.
• Looking at the Operating Margin, with a value of 29.68%, GOOGL belongs to the top of the industry, outperforming 97.01% of the companies in the same industry.
• GOOGL's Operating Margin has improved in the last couple of years.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of GOOGL

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.