Alphabet Inc.
Alphabet Inc. Fundamental Analysis
Alphabet Inc. (GOOGL) shows strong financial fundamentals with a PE ratio of 28.85, profit margin of 32.80%, and ROE of 35.00%. The company generates $403.7B in annual revenue with strong year-over-year growth of 13.87%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 86.2/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze GOOGL's fundamental strength across five key dimensions:
Efficiency Score
ExcellentGOOGL demonstrates superior asset utilization.
Valuation Score
WeakGOOGL trades at a premium to fair value.
Growth Score
ExcellentGOOGL delivers strong and consistent growth momentum.
Financial Health Score
ExcellentGOOGL maintains a strong and stable balance sheet.
Profitability Score
ExcellentGOOGL achieves industry-leading margins.
Key Financial Metrics
Is GOOGL Expensive or Cheap?
P/E Ratio
GOOGL trades at 28.85 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, GOOGL's PEG of 4.34 indicates potential overvaluation.
Price to Book
The market values Alphabet Inc. at 9.18 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 20.91 times EBITDA. This signals the market has high growth expectations.
How Well Does GOOGL Make Money?
Net Profit Margin
For every $100 in sales, Alphabet Inc. keeps $32.80 as profit after all expenses.
Operating Margin
Core operations generate 32.04 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $35.00 in profit for every $100 of shareholder equity.
ROA
Alphabet Inc. generates $22.20 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Alphabet Inc. generates strong operating cash flow of $165.04B, reflecting robust business health.
Free Cash Flow
Alphabet Inc. generates strong free cash flow of $73.41B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.07 in free cash annually.
FCF Yield
GOOGL converts 1.92% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.85
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.34
vs 25 benchmark
P/B Ratio
Price to book value ratio
9.18
vs 25 benchmark
P/S Ratio
Price to sales ratio
9.48
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.17
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.005
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.35
vs 25 benchmark
ROA
Return on assets percentage
0.22
vs 25 benchmark
ROCE
Return on capital employed
0.26
vs 25 benchmark
How GOOGL Stacks Against Its Sector Peers
| Metric | GOOGL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.85 | 35.19 | Better (Cheaper) |
| ROE | 35.00% | 1155.00% | Weak |
| Net Margin | 32.80% | -127067.00% (disorted) | Strong |
| Debt/Equity | 0.17 | 0.41 | Strong (Low Leverage) |
| Current Ratio | 2.01 | 4.71 | Strong Liquidity |
| ROA | 22.20% | -314918.00% (disorted) | Strong |
GOOGL outperforms its industry in 5 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Alphabet Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
143.16%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
227.80%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
158.42%
Industry Style: Growth, Innovation, High Beta
High Growth