NASDAQ:GOOG is showing good growth, while it is not too expensive.

Last update: Oct 4, 2024

ALPHABET INC-CL C (NASDAQ:GOOG) was identified as an affordable growth stock by our stock screener. NASDAQ:GOOG is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

A Closer Look at Growth for NASDAQ:GOOG

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:GOOG has received 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.
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.
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.

Valuation Analysis for NASDAQ:GOOG

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:GOOG has received a 6 out of 10:

Based on the Price/Earnings ratio, GOOG is valued a bit cheaper than 68.57% of the companies in the same industry.
GOOG's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 30.77.
Based on the Price/Forward Earnings ratio, GOOG is valued a bit cheaper than 65.71% of the companies in the same industry.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GOOG indicates a somewhat cheap valuation: GOOG is cheaper than 68.57% of the companies listed in the same industry.
62.86% 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.
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.

Health Assessment of NASDAQ:GOOG

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:GOOG scores a 9 out of 10:

GOOG has an Altman-Z score of 13.43. This indicates that GOOG is financially healthy and has little risk of bankruptcy at the moment.
GOOG has a Altman-Z score of 13.43. This is amongst the best in the industry. GOOG outperforms 92.86% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 0.23, GOOG belongs to the top of the industry, outperforming 82.86% of the companies in the same industry.
A Debt/Equity ratio of 0.04 indicates that GOOG is not too dependend on debt financing.
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.

Understanding NASDAQ:GOOG's Profitability

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:

Looking at the Return On Assets, with a value of 21.13%, GOOG belongs to the top of the industry, outperforming 95.71% of the companies in the same industry.
GOOG has a better Return On Equity (29.15%) than 94.29% of its industry peers.
With an excellent Return On Invested Capital value of 25.85%, GOOG belongs to the best of the industry, outperforming 97.14% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital 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.
GOOG has a better Profit Margin (26.70%) than 94.29% of its industry peers.
GOOG has a Operating Margin of 30.77%. This is amongst the best in the industry. GOOG outperforms 97.14% of its industry peers.
GOOG's Operating Margin has improved in the last couple of years.

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

Our latest full fundamental report of GOOG contains the most current fundamental analsysis.

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.