ALPHABET INC-CL A (GOOGL) Stock Fundamental Analysis
NASDAQ:GOOGL - Nasdaq - US02079K3059 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to GOOGL. GOOGL was compared to 70 industry peers in the Interactive Media & Services industry. Both the health and profitability get an excellent rating, making GOOGL a very profitable company, without any liquidiy or solvency issues. GOOGL is growing strongly while it is still valued neutral. This is a good combination! These ratings could make GOOGL a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
GOOGL had positive earnings in the past year.
GOOGL had a positive operating cash flow in the past year.
Each year in the past 5 years GOOGL has been profitable.
Each year in the past 5 years GOOGL had a positive operating cash flow.
1.2 Ratios
GOOGL has a Return On Assets of 23.35%. This is amongst the best in the industry. GOOGL outperforms 95.71% of its industry peers.
With an excellent Return On Equity value of 32.15%, GOOGL belongs to the best of the industry, outperforming 95.71% of the companies in the same industry.
GOOGL has a better Return On Invested Capital (26.71%) than 97.14% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GOOGL is significantly above the industry average of 12.03%.
The last Return On Invested Capital (26.71%) for GOOGL 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
GOOGL has a Profit Margin of 30.86%. This is amongst the best in the industry. GOOGL outperforms 94.29% of its industry peers.
GOOGL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 33.15%, GOOGL belongs to the best of the industry, outperforming 97.14% of the companies in the same industry.
In the last couple of years the Operating Margin of GOOGL has grown nicely.
GOOGL has a Gross Margin (58.59%) which is comparable to the rest of the industry.
GOOGL's Gross Margin has been stable in the last couple of years.
| 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
GOOGL has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for GOOGL has been reduced compared to 1 year ago.
The number of shares outstanding for GOOGL has been reduced compared to 5 years ago.
Compared to 1 year ago, GOOGL has an improved debt to assets ratio.
2.2 Solvency
GOOGL has an Altman-Z score of 12.40. This indicates that GOOGL is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 12.40, GOOGL belongs to the top of the industry, outperforming 88.57% of the companies in the same industry.
GOOGL has a debt to FCF ratio of 0.19. This is a very positive value and a sign of high solvency as it would only need 0.19 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.19, GOOGL is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
GOOGL 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, GOOGL is in line with its industry, outperforming 55.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.19 | ||
| Altman-Z | 12.4 |
ROIC/WACC3
WACC8.9%
2.3 Liquidity
GOOGL has a Current Ratio of 1.77. This is a normal value and indicates that GOOGL is financially healthy and should not expect problems in meeting its short term obligations.
GOOGL has a Current ratio (1.77) which is comparable to the rest of the industry.
A Quick Ratio of 1.77 indicates that GOOGL should not have too much problems paying its short term obligations.
GOOGL's Quick ratio of 1.77 is in line compared to the rest of the industry. GOOGL outperforms 42.86% of its industry peers.
GOOGL does not score too well on the current and quick ratio evaluation. However, as it has 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
GOOGL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.29%, which is quite impressive.
GOOGL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.25% yearly.
GOOGL shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.07%.
Measured over the past years, GOOGL shows a quite strong growth in Revenue. The Revenue has been growing by 16.68% on average per year.
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
The Earnings Per Share is expected to grow by 15.78% on average over the next years. This is quite good.
Based on estimates for the next years, GOOGL 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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 20.86, which indicates a rather expensive current valuation of GOOGL.
Based on the Price/Earnings ratio, GOOGL is valued a bit cheaper than the industry average as 64.29% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.21. GOOGL is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 16.77, GOOGL is valued correctly.
Based on the Price/Forward Earnings ratio, GOOGL is valued a bit cheaper than 68.57% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.70. GOOGL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.86 | ||
| Fwd PE | 16.77 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GOOGL indicates a somewhat cheap valuation: GOOGL is cheaper than 70.00% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GOOGL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.5 | ||
| EV/EBITDA | 14.64 |
4.3 Compensation for Growth
GOOGL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of GOOGL may justify a higher PE ratio.
A more expensive valuation may be justified as GOOGL's earnings are expected to grow with 13.91% in the coming years.
PEG (NY)0.92
PEG (5Y)0.83
EPS Next 2Y14.12%
EPS Next 3Y13.91%
5. Dividend
5.1 Amount
With a yearly dividend of 0.47%, GOOGL is not a good candidate for dividend investing.
GOOGL's Dividend Yield is rather good when compared to the industry average which is at 3.05. GOOGL pays more dividend than 90.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, GOOGL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
5.2 History
GOOGL is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
GOOGL 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%
175.84
-0.39 (-0.22%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryInteractive Media & Services
Earnings (Last)
Earnings (Next)
Inst Owners80.92%
Inst Owner Change-0.28%
Ins Owners0.05%
Ins Owner Change-0.73%
Market Cap2133.82B
Analysts81.56
Price Target205.78 (17.03%)
Short Float %1.17%
Short Ratio1.62
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)-0.04%
PT rev (3m)-6.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.26%
EPS NY rev (1m)0.07%
EPS NY rev (3m)7.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.7%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.86 | ||
| Fwd PE | 16.77 | ||
| P/S | 5.93 | ||
| P/FCF | 28.5 | ||
| P/OCF | 16.09 | ||
| P/B | 6.18 | ||
| P/tB | 6.82 | ||
| EV/EBITDA | 14.64 |
EPS(TTM)8.43
EY4.79%
EPS(NY)10.48
Fwd EY5.96%
FCF(TTM)6.17
FCFY3.51%
OCF(TTM)10.93
OCFY6.21%
SpS29.64
BVpS28.45
TBVpS25.8
PEG (NY)0.92
PEG (5Y)0.83
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 | 12.4 |
F-Score7
WACC8.9%
ROIC/WACC3
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%