Don't overlook NASDAQ:GOOG—a stock with solid growth prospects and a reasonable valuation.

Last update: Nov 19, 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.

Looking at the Growth

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:

The Earnings Per Share has grown by an impressive 44.72% over the past year.
GOOG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.55% yearly.
GOOG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.38%.
The Revenue has been growing by 17.57% on average over the past years. This is quite good.
GOOG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.96% yearly.
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.

What does the Valuation looks like 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 5 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of GOOG indicates a somewhat cheap valuation: GOOG is cheaper than 67.61% of the companies listed in the same industry.
Based on the Price/Forward Earnings ratio, GOOG is valued a bit cheaper than 63.38% of the companies in the same industry.
GOOG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 67.61% of the companies in the same industry.
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 22.06% in the coming years.

Analyzing Health Metrics

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:GOOG, the assigned 9 reflects its health status:

GOOG has an Altman-Z score of 13.78. This indicates that GOOG is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 13.78, GOOG belongs to the top of the industry, outperforming 94.37% of the companies in the same industry.
GOOG has a debt to FCF ratio of 0.26. This is a very positive value and a sign of high solvency as it would only need 0.26 years to pay back of all of its debts.
GOOG has a Debt to FCF ratio of 0.26. This is amongst the best in the industry. GOOG outperforms 80.28% of its industry peers.
A Debt/Equity ratio of 0.04 indicates that GOOG is not too dependend on debt financing.
GOOG does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Assessment of 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's Return On Assets of 21.91% is amongst the best of the industry. GOOG outperforms 97.18% of its industry peers.
With an excellent Return On Equity value of 30.01%, GOOG belongs to the best of the industry, outperforming 97.18% of the companies in the same industry.
With an excellent Return On Invested Capital value of 26.84%, GOOG belongs to the best of the industry, outperforming 97.18% 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 11.21%.
The 3 year average ROIC (22.84%) for GOOG is below the current ROIC(26.84%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 27.74%, GOOG belongs to the top of the industry, outperforming 94.37% of the companies in the same industry.
With an excellent Operating Margin value of 32.02%, GOOG belongs to the best of the industry, outperforming 97.18% of the companies in the same industry.
GOOG's Operating Margin has improved in the last couple of years.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.