Despite its growth, NASDAQ:GOOG remains within the realm of affordability.

Last update: Jun 19, 2024

Consider ALPHABET INC-CL C (NASDAQ:GOOG) as an affordable growth stock, identified by our stock screening tool. NASDAQ:GOOG is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

A Closer Look at Growth for NASDAQ:GOOG

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:GOOG was assigned a score of 7 for growth:

The Earnings Per Share has grown by an impressive 45.21% over the past year.
Measured over the past years, GOOG 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, GOOG shows a quite strong growth in Revenue. The Revenue has grown by 11.78% in the last year.
The Revenue has been growing by 17.57% on average over the past years. This is quite good.
The Earnings Per Share is expected to grow by 19.96% on average over the next years. This is quite good.
The Revenue is expected to grow by 10.62% on average over the next years. This is quite good.

A Closer Look at Valuation for NASDAQ:GOOG

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:GOOG scores a 6 out of 10:

Based on the Price/Earnings ratio, GOOG is valued a bit cheaper than the industry average as 65.67% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GOOG indicates a somewhat cheap valuation: GOOG is cheaper than 64.18% of the companies listed in the same industry.
GOOG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 65.67% of the companies in the same industry.
65.67% of the companies in the same industry are more expensive than GOOG, based on the Price/Free Cash Flow ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GOOG has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as GOOG's earnings are expected to grow with 20.88% in the coming years.

What does the Health looks like for NASDAQ:GOOG

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:GOOG has received a 8 out of 10:

An Altman-Z score of 13.99 indicates that GOOG is not in any danger for bankruptcy at the moment.
GOOG's Altman-Z score of 13.99 is amongst the best of the industry. GOOG outperforms 95.52% of its industry peers.
GOOG 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.
With an excellent Debt to FCF ratio value of 0.20, GOOG belongs to the best of the industry, outperforming 83.58% of the companies in the same industry.
GOOG has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
GOOG has a Current Ratio of 2.15. This indicates that GOOG is financially healthy and has no problem in meeting its short term obligations.
A Quick Ratio of 2.15 indicates that GOOG has no problem at all paying its short term obligations.

Profitability Assessment of NASDAQ:GOOG

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:GOOG has earned a 9 out of 10:

GOOG's Return On Assets of 20.23% is amongst the best of the industry. GOOG outperforms 94.03% of its industry peers.
GOOG has a better Return On Equity (28.14%) than 92.54% of its industry peers.
Looking at the Return On Invested Capital, with a value of 24.32%, GOOG belongs to the top of the industry, outperforming 97.01% 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 10.07%.
The last Return On Invested Capital (24.32%) for GOOG is above the 3 year average (22.54%), which is a sign of increasing profitability.
The Profit Margin of GOOG (25.90%) is better than 91.04% of its industry peers.
With an excellent Operating Margin value of 29.68%, GOOG belongs to the best of the industry, outperforming 95.52% of the companies in the same industry.
GOOG's Operating Margin has improved in the last couple of years.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.