For those who appreciate growth without the sticker shock, NASDAQ:GOOG is worth considering.

Last update: Aug 1, 2024

Here's ALPHABET INC-CL C (NASDAQ:GOOG) for you, a growth stock our stock screener believes is undervalued. NASDAQ:GOOG is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Growth Assessment of NASDAQ:GOOG

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:GOOG has earned a 7 for growth:

GOOG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 47.67%, which is quite impressive.
GOOG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.55% yearly.
Looking at the last year, GOOG shows a quite strong growth in Revenue. The Revenue has grown by 13.38% in the last year.
Measured over the past years, GOOG shows a quite strong growth in Revenue. The Revenue has been growing by 17.57% on average per year.
Based on estimates for the next years, GOOG will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.96% on average per year.
The Revenue is expected to grow by 10.62% on average over the next years. This is quite good.

Valuation Insights: 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 63.77% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, GOOG is valued a bit cheaper than 65.22% of the companies in the same industry.
Based on the Enterprise Value to EBITDA ratio, GOOG is valued a bit cheaper than 68.12% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GOOG is valued a bit cheaper than the industry average as 65.22% of the companies are valued more expensively.
GOOG'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 GOOG may justify a higher PE ratio.
A more expensive valuation may be justified as GOOG's earnings are expected to grow with 21.15% in the coming years.

Assessing Health for NASDAQ:GOOG

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:GOOG, the assigned 8 for health provides valuable insights:

An Altman-Z score of 13.86 indicates that GOOG is not in any danger for bankruptcy at the moment.
The Altman-Z score of GOOG (13.86) is better than 94.20% of its industry peers.
GOOG has a debt to FCF ratio of 0.23. This is a very positive value and a sign of high solvency as it would only need 0.23 years to pay back of all of its debts.
The Debt to FCF ratio of GOOG (0.23) is better than 84.06% of its industry peers.
A Debt/Equity ratio of 0.04 indicates that GOOG is not too dependend on debt financing.
A Current Ratio of 2.08 indicates that GOOG has no problem at all paying its short term obligations.
GOOG has a Quick Ratio of 2.08. This indicates that GOOG is financially healthy and has no problem in meeting its short term obligations.

What does the Profitability looks like for NASDAQ:GOOG

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:GOOG was assigned a score of 9 for profitability:

GOOG has a Return On Assets of 21.13%. This is amongst the best in the industry. GOOG outperforms 95.65% of its industry peers.
With an excellent Return On Equity value of 29.15%, GOOG belongs to the best of the industry, outperforming 92.75% of the companies in the same industry.
With an excellent Return On Invested Capital value of 25.85%, GOOG belongs to the best of the industry, outperforming 97.10% of the companies in the same industry.
GOOG had an Average Return On Invested Capital over the past 3 years of 22.84%. This is significantly above the industry average of 10.49%.
The 3 year average ROIC (22.84%) for GOOG is below the current ROIC(25.85%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 26.70%, GOOG belongs to the top of the industry, outperforming 92.75% of the companies in the same industry.
Looking at the Operating Margin, with a value of 30.77%, GOOG belongs to the top of the industry, outperforming 97.10% 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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.