ALPHABET INC-CL C (GOOG) Stock Fundamental Analysis
USA - NASDAQ:GOOG - US02079K1079 - Common Stock
247.18 USD
+0.61 (+0.25%)
247.4 USD
+0.22 (+0.09%)
We assign a fundamental rating of 7 out of 10 to GOOG. GOOG was compared to 69 industry peers in the Interactive Media & Services industry. GOOG gets an excellent profitability rating and is at the same time showing great financial health properties. GOOG is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings could make GOOG a good candidate 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
Looking at the Return On Assets, with a value of 23.02%, GOOG belongs to the top of the industry, outperforming 94.20% of the companies in the same industry.
With an excellent Return On Equity value of 31.85%, GOOG belongs to the best of the industry, outperforming 95.65% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 25.81%, GOOG belongs to the top of the industry, outperforming 94.20% 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 12.98%.
The last Return On Invested Capital (25.81%) for GOOG is above the 3 year average (24.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.02% | ||
| ROE | 31.85% | ||
| ROIC | 25.81% |
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
The Profit Margin of GOOG (31.12%) is better than 91.30% of its industry peers.
GOOG's Profit Margin has improved in the last couple of years.
GOOG has a Operating Margin of 33.53%. This is amongst the best in the industry. GOOG outperforms 95.65% of its industry peers.
In the last couple of years the Operating Margin of GOOG has grown nicely.
The Gross Margin of GOOG (58.94%) is comparable to the rest of the industry.
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 | 33.53% | ||
| PM (TTM) | 31.12% | ||
| GM | 58.94% |
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
GOOG has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, GOOG has less shares outstanding
GOOG has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, GOOG has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 15.41 indicates that GOOG is not in any danger for bankruptcy at the moment.
GOOG's Altman-Z score of 15.41 is amongst the best of the industry. GOOG outperforms 94.20% of its industry peers.
The Debt to FCF ratio of GOOG is 0.40, which is an excellent value as it means it would take GOOG, only 0.40 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.40, GOOG is in the better half of the industry, outperforming 79.71% of the companies in the same industry.
GOOG has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
GOOG has a Debt to Equity ratio (0.07) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.4 | ||
| Altman-Z | 15.41 |
ROIC/WACC2.72
WACC9.49%
2.3 Liquidity
GOOG has a Current Ratio of 1.90. This is a normal value and indicates that GOOG is financially healthy and should not expect problems in meeting its short term obligations.
GOOG has a Current ratio (1.90) which is comparable to the rest of the industry.
GOOG has a Quick Ratio of 1.90. This is a normal value and indicates that GOOG is financially healthy and should not expect problems in meeting its short term obligations.
GOOG has a Quick ratio (1.90) which is comparable to the rest of the industry.
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 | 1.9 | ||
| Quick Ratio | 1.9 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 26.97% over the past year.
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 13.13%.
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)26.97%
EPS 3Y12.78%
EPS 5Y25.25%
EPS Q2Q%22.22%
Revenue 1Y (TTM)13.13%
Revenue growth 3Y10.75%
Revenue growth 5Y16.68%
Sales Q2Q%13.79%
3.2 Future
GOOG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.07% yearly.
The Revenue is expected to grow by 11.13% on average over the next years. This is quite good.
EPS Next Y27.24%
EPS Next 2Y16.54%
EPS Next 3Y15.45%
EPS Next 5Y17.07%
Revenue Next Year12.68%
Revenue Next 2Y11.94%
Revenue Next 3Y11.51%
Revenue Next 5Y11.13%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
The Price/Earnings ratio is 27.93, which means the current valuation is very expensive for GOOG.
GOOG's Price/Earnings ratio is in line with the industry average.
GOOG's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.54.
A Price/Forward Earnings ratio of 22.61 indicates a rather expensive valuation of GOOG.
GOOG's Price/Forward Earnings ratio is in line with the industry average.
GOOG is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.05, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.93 | ||
| Fwd PE | 22.61 |
4.2 Price Multiples
60.87% of the companies in the same industry are more expensive than GOOG, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as GOOG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.8 | ||
| EV/EBITDA | 20.02 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of GOOG may justify a higher PE ratio.
GOOG's earnings are expected to grow with 15.45% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.03
PEG (5Y)1.11
EPS Next 2Y16.54%
EPS Next 3Y15.45%
5. Dividend
5.1 Amount
GOOG has a yearly dividend return of 0.34%, which is pretty low.
Compared to an average industry Dividend Yield of 4.33, GOOG pays a better dividend. On top of this GOOG pays more dividend than 91.30% of the companies listed in the same industry.
With a Dividend Yield of 0.34, GOOG pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
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 8.54% of its income as dividend. This is a sustainable payout ratio.
DP8.54%
EPS Next 2Y16.54%
EPS Next 3Y15.45%
247.18
+0.61 (+0.25%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryInteractive Media & Services
Earnings (Last)
Earnings (Next)
Inst Owners81.14%
Inst Owner Change0.12%
Ins Owners0.05%
Ins Owner Change0%
Market Cap2989.39B
Analysts81.47
Price Target235.08 (-4.9%)
Short Float %0.54%
Short Ratio1.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
Yearly Dividend0.6
Dividend Growth(5Y)N/A
DP8.54%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.1%
Min EPS beat(2)2.67%
Max EPS beat(2)9.52%
EPS beat(4)3
Avg EPS beat(4)5.45%
Min EPS beat(4)-1.9%
Max EPS beat(4)11.53%
EPS beat(8)5
Avg EPS beat(8)5.77%
EPS beat(12)7
Avg EPS beat(12)2.18%
EPS beat(16)9
Avg EPS beat(16)2.23%
Revenue beat(2)0
Avg Revenue beat(2)-1.05%
Min Revenue beat(2)-1.7%
Max Revenue beat(2)-0.4%
Revenue beat(4)0
Avg Revenue beat(4)-1.45%
Min Revenue beat(4)-3.01%
Max Revenue beat(4)-0.4%
Revenue beat(8)0
Avg Revenue beat(8)-1.55%
Revenue beat(12)0
Avg Revenue beat(12)-1.93%
Revenue beat(16)1
Avg Revenue beat(16)-1.76%
PT rev (1m)5.67%
PT rev (3m)13.81%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)4.58%
EPS NY rev (1m)0.08%
EPS NY rev (3m)3.82%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)2.64%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)2.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.93 | ||
| Fwd PE | 22.61 | ||
| P/S | 8.05 | ||
| P/FCF | 44.8 | ||
| P/OCF | 22.36 | ||
| P/B | 8.24 | ||
| P/tB | 9.04 | ||
| EV/EBITDA | 20.02 |
EPS(TTM)8.85
EY3.58%
EPS(NY)10.93
Fwd EY4.42%
FCF(TTM)5.52
FCFY2.23%
OCF(TTM)11.06
OCFY4.47%
SpS30.71
BVpS30.01
TBVpS27.33
PEG (NY)1.03
PEG (5Y)1.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.02% | ||
| ROE | 31.85% | ||
| ROCE | 30.02% | ||
| ROIC | 25.81% | ||
| ROICexc | 33.49% | ||
| ROICexgc | 37.26% | ||
| OM | 33.53% | ||
| PM (TTM) | 31.12% | ||
| GM | 58.94% | ||
| FCFM | 17.97% |
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-Score6
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.4 | ||
| Debt/EBITDA | 0.18 | ||
| Cap/Depr | 378.95% | ||
| Cap/Sales | 18.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 94.03% | ||
| Profit Quality | 57.74% | ||
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.9 | ||
| Altman-Z | 15.41 |
F-Score6
WACC9.49%
ROIC/WACC2.72
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)26.97%
EPS 3Y12.78%
EPS 5Y25.25%
EPS Q2Q%22.22%
EPS Next Y27.24%
EPS Next 2Y16.54%
EPS Next 3Y15.45%
EPS Next 5Y17.07%
Revenue 1Y (TTM)13.13%
Revenue growth 3Y10.75%
Revenue growth 5Y16.68%
Sales Q2Q%13.79%
Revenue Next Year12.68%
Revenue Next 2Y11.94%
Revenue Next 3Y11.51%
Revenue Next 5Y11.13%
EBIT growth 1Y23.29%
EBIT growth 3Y13.04%
EBIT growth 5Y25.91%
EBIT Next Year60.51%
EBIT Next 3Y28.69%
EBIT Next 5Y22.53%
FCF growth 1Y-6.14%
FCF growth 3Y2.78%
FCF growth 5Y18.63%
OCF growth 1Y34.87%
OCF growth 3Y10.99%
OCF growth 5Y18.11%