ALPHABET INC-CL C (GOOG) Stock Fundamental Analysis
NASDAQ:GOOG - Nasdaq - US02079K1079 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to GOOG. GOOG was compared to 70 industry peers in the Interactive Media & Services industry. Both the health and profitability get an excellent rating, making GOOG a very profitable company, without any liquidiy or solvency issues. GOOG is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make GOOG suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year GOOG was profitable.
GOOG had a positive operating cash flow in the past year.
GOOG had positive earnings in each of the past 5 years.
In the past 5 years GOOG always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of GOOG (23.35%) is better than 94.29% of its industry peers.
GOOG's Return On Equity of 32.15% is amongst the best of the industry. GOOG outperforms 94.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 26.71%, GOOG belongs to the top of the industry, outperforming 95.71% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GOOG is significantly above the industry average of 12.03%.
The last Return On Invested Capital (26.71%) for GOOG is above the 3 year average (24.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.35% | ||
| ROE | 32.15% | ||
| ROIC | 26.71% |
ROA(3y)19%
ROA(5y)18.15%
ROE(3y)26.75%
ROE(5y)25.71%
ROIC(3y)24.15%
ROIC(5y)21.77%
1.3 Margins
GOOG has a Profit Margin of 30.86%. This is amongst the best in the industry. GOOG outperforms 92.86% of its industry peers.
In the last couple of years the Profit Margin of GOOG has grown nicely.
Looking at the Operating Margin, with a value of 33.15%, GOOG belongs to the top of the industry, outperforming 95.71% of the companies in the same industry.
GOOG's Operating Margin has improved in the last couple of years.
GOOG has a Gross Margin of 58.59%. This is comparable to the rest of the industry: GOOG outperforms 45.71% of its industry peers.
In the last couple of years the Gross Margin of GOOG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.15% | ||
| PM (TTM) | 30.86% | ||
| GM | 58.59% |
OM growth 3Y2.06%
OM growth 5Y7.91%
PM growth 3Y-1.04%
PM growth 5Y6.16%
GM growth 3Y0.73%
GM growth 5Y0.93%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), GOOG is creating value.
GOOG has less shares outstanding than it did 1 year ago.
The number of shares outstanding for GOOG has been reduced compared to 5 years ago.
The debt/assets ratio for GOOG has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 12.64 indicates that GOOG is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 12.64, GOOG belongs to the top of the industry, outperforming 91.43% of the companies in the same industry.
The Debt to FCF ratio of GOOG is 0.19, which is an excellent value as it means it would take GOOG, only 0.19 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GOOG (0.19) is better than 78.57% of its industry peers.
GOOG has a Debt/Equity ratio of 0.04. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.04, GOOG is in line with its industry, outperforming 54.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.19 | ||
| Altman-Z | 12.64 |
ROIC/WACC2.98
WACC8.96%
2.3 Liquidity
A Current Ratio of 1.77 indicates that GOOG should not have too much problems paying its short term obligations.
GOOG has a Current ratio (1.77) which is in line with its industry peers.
A Quick Ratio of 1.77 indicates that GOOG should not have too much problems paying its short term obligations.
GOOG's Quick ratio of 1.77 is in line compared to the rest of the industry. GOOG outperforms 41.43% of its industry peers.
The current and quick ratio evaluation for GOOG is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.77 |
3. Growth
3.1 Past
GOOG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.29%, which is quite impressive.
Measured over the past years, GOOG shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.25% on average per year.
GOOG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.07%.
GOOG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.68% yearly.
EPS 1Y (TTM)29.29%
EPS 3Y12.78%
EPS 5Y25.25%
EPS Q2Q%20.11%
Revenue 1Y (TTM)13.07%
Revenue growth 3Y10.75%
Revenue growth 5Y16.68%
Sales Q2Q%12.04%
3.2 Future
Based on estimates for the next years, GOOG will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.78% on average per year.
Based on estimates for the next years, GOOG will show a quite strong growth in Revenue. The Revenue will grow by 10.45% on average per year.
EPS Next Y22.56%
EPS Next 2Y14.12%
EPS Next 3Y13.91%
EPS Next 5Y15.78%
Revenue Next Year10.4%
Revenue Next 2Y10.45%
Revenue Next 3Y10.44%
Revenue Next 5Y10.45%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
GOOG is valuated rather expensively with a Price/Earnings ratio of 21.42.
GOOG's Price/Earnings ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 62.86% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.45. GOOG is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 17.22, the valuation of GOOG can be described as rather expensive.
67.14% of the companies in the same industry are more expensive than GOOG, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, GOOG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.42 | ||
| Fwd PE | 17.22 |
4.2 Price Multiples
GOOG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 67.14% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GOOG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.26 | ||
| EV/EBITDA | 15.02 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of GOOG may justify a higher PE ratio.
GOOG's earnings are expected to grow with 13.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.95
PEG (5Y)0.85
EPS Next 2Y14.12%
EPS Next 3Y13.91%
5. Dividend
5.1 Amount
With a yearly dividend of 0.47%, GOOG is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.05, GOOG pays a better dividend. On top of this GOOG pays more dividend than 91.43% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, GOOG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
5.2 History
GOOG does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
GOOG pays out 8.83% of its income as dividend. This is a sustainable payout ratio.
DP8.83%
EPS Next 2Y14.12%
EPS Next 3Y13.91%
180.55
+0.79 (+0.44%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryInteractive Media & Services
Earnings (Last)
Earnings (Next)
Inst Owners80.92%
Inst Owner Change-0.79%
Ins Owners0.05%
Ins Owner Change0%
Market Cap2190.97B
Analysts81.56
Price Target206.56 (14.41%)
Short Float %0.57%
Short Ratio1.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
Yearly Dividend0.6
Dividend Growth(5Y)N/A
DP8.83%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.81%
Min EPS beat(2)-1.9%
Max EPS beat(2)9.52%
EPS beat(4)2
Avg EPS beat(4)4.66%
Min EPS beat(4)-1.9%
Max EPS beat(4)11.53%
EPS beat(8)5
Avg EPS beat(8)5.99%
EPS beat(12)6
Avg EPS beat(12)1.28%
EPS beat(16)9
Avg EPS beat(16)4.36%
Revenue beat(2)0
Avg Revenue beat(2)-2.35%
Min Revenue beat(2)-3.01%
Max Revenue beat(2)-1.7%
Revenue beat(4)0
Avg Revenue beat(4)-1.92%
Min Revenue beat(4)-3.01%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-1.56%
Revenue beat(12)0
Avg Revenue beat(12)-2.16%
Revenue beat(16)2
Avg Revenue beat(16)-1.3%
PT rev (1m)-0.77%
PT rev (3m)-7.01%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.24%
EPS NY rev (1m)0.07%
EPS NY rev (3m)7.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.71%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.42 | ||
| Fwd PE | 17.22 | ||
| P/S | 6.09 | ||
| P/FCF | 29.26 | ||
| P/OCF | 16.52 | ||
| P/B | 6.35 | ||
| P/tB | 7 | ||
| EV/EBITDA | 15.02 |
EPS(TTM)8.43
EY4.67%
EPS(NY)10.48
Fwd EY5.81%
FCF(TTM)6.17
FCFY3.42%
OCF(TTM)10.93
OCFY6.05%
SpS29.64
BVpS28.45
TBVpS25.8
PEG (NY)0.95
PEG (5Y)0.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.35% | ||
| ROE | 32.15% | ||
| ROCE | 31.07% | ||
| ROIC | 26.71% | ||
| ROICexc | 35.54% | ||
| ROICexgc | 40% | ||
| OM | 33.15% | ||
| PM (TTM) | 30.86% | ||
| GM | 58.59% | ||
| FCFM | 20.82% |
ROA(3y)19%
ROA(5y)18.15%
ROE(3y)26.75%
ROE(5y)25.71%
ROIC(3y)24.15%
ROIC(5y)21.77%
ROICexc(3y)36.09%
ROICexc(5y)35.99%
ROICexgc(3y)42.14%
ROICexgc(5y)42.46%
ROCE(3y)28.1%
ROCE(5y)25.33%
ROICexcg growth 3Y-6.79%
ROICexcg growth 5Y3.67%
ROICexc growth 3Y-5.45%
ROICexc growth 5Y5.76%
OM growth 3Y2.06%
OM growth 5Y7.91%
PM growth 3Y-1.04%
PM growth 5Y6.16%
GM growth 3Y0.73%
GM growth 5Y0.93%
F-Score7
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.19 | ||
| Debt/EBITDA | 0.09 | ||
| Cap/Depr | 352.27% | ||
| Cap/Sales | 16.05% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 97.77% | ||
| Profit Quality | 67.46% | ||
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.77 | ||
| Altman-Z | 12.64 |
F-Score7
WACC8.96%
ROIC/WACC2.98
Cap/Depr(3y)270.25%
Cap/Depr(5y)234.3%
Cap/Sales(3y)12.21%
Cap/Sales(5y)11.68%
Profit Quality(3y)88.97%
Profit Quality(5y)92.29%
High Growth Momentum
Growth
EPS 1Y (TTM)29.29%
EPS 3Y12.78%
EPS 5Y25.25%
EPS Q2Q%20.11%
EPS Next Y22.56%
EPS Next 2Y14.12%
EPS Next 3Y13.91%
EPS Next 5Y15.78%
Revenue 1Y (TTM)13.07%
Revenue growth 3Y10.75%
Revenue growth 5Y16.68%
Sales Q2Q%12.04%
Revenue Next Year10.4%
Revenue Next 2Y10.45%
Revenue Next 3Y10.44%
Revenue Next 5Y10.45%
EBIT growth 1Y25.93%
EBIT growth 3Y13.04%
EBIT growth 5Y25.91%
EBIT Next Year56.95%
EBIT Next 3Y26.18%
EBIT Next 5Y21.09%
FCF growth 1Y20.95%
FCF growth 3Y2.78%
FCF growth 5Y18.63%
OCF growth 1Y47.5%
OCF growth 3Y10.99%
OCF growth 5Y18.11%