In the world of growth stocks, NASDAQ:GOOG shines as a value proposition.

Last update: Sep 13, 2024

Our stock screening tool has pinpointed ALPHABET INC-CL C (NASDAQ:GOOG) as a growth stock that isn't overvalued. NASDAQ:GOOG is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Growth Analysis for NASDAQ:GOOG

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:GOOG boasts a 7 out of 10:

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.
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.
The Revenue has grown by 13.38% in the past year. This is quite good.
GOOG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.57% yearly.
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.
Based on estimates for the next years, GOOG will show a quite strong growth in Revenue. The Revenue will grow by 10.62% on average per year.

Looking at the Valuation

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:GOOG, the assigned 6 reflects its valuation:

GOOG's Price/Earnings ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 68.12% of the companies in the same industry.
GOOG is valuated rather cheaply when we compare the Price/Earnings ratio to 30.24, which is the current average of the S&P500 Index.
GOOG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 63.77% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of GOOG to the average of the S&P500 Index (21.81), we can say GOOG is valued slightly cheaper.
Based on the Enterprise Value to EBITDA ratio, GOOG is valued a bit cheaper than 66.67% of the companies in the same industry.
GOOG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 63.77% of the companies in the same industry.
The 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.
GOOG's earnings are expected to grow with 21.32% in the coming years. This may justify a more expensive valuation.

Exploring NASDAQ:GOOG's Health

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:GOOG has achieved a 9 out of 10:

An Altman-Z score of 12.68 indicates that GOOG is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 12.68, GOOG belongs to the best of the industry, outperforming 92.75% of the companies in the same industry.
The Debt to FCF ratio of GOOG is 0.23, which is an excellent value as it means it would take GOOG, only 0.23 years of fcf income to pay off all of its debts.
GOOG's Debt to FCF ratio of 0.23 is amongst the best of the industry. GOOG outperforms 82.61% of its industry peers.
GOOG has a Debt/Equity ratio of 0.04. This is a healthy value indicating a solid balance between debt and equity.
GOOG has a Current Ratio of 2.08. This indicates that GOOG is financially healthy and has no problem in meeting 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.

Assessing Profitability for NASDAQ:GOOG

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:GOOG, the assigned 9 is noteworthy for profitability:

GOOG has a better Return On Assets (21.13%) than 95.65% of its industry peers.
The Return On Equity of GOOG (29.15%) is better than 94.20% of its industry peers.
Looking at the Return On Invested Capital, with a value of 25.85%, GOOG belongs to the top of the industry, outperforming 97.10% 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 10.42%.
The last Return On Invested Capital (25.85%) for GOOG is above the 3 year average (22.84%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 26.70%, GOOG belongs to the best of the industry, outperforming 94.20% of the companies in the same industry.
With an excellent Operating Margin value of 30.77%, GOOG belongs to the best 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.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

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

Disclaimer

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.