NASDAQ:GOOG stands out as a growth opportunity that won't break the bank.

Last update: Dec 11, 2024

Uncover the potential of ALPHABET INC-CL C (NASDAQ:GOOG), a growth stock that our stock screener found to be reasonably priced. NASDAQ:GOOG is excelling in growth aspects, maintaining a healthy financial position, and still offers an attractive valuation. We'll examine each aspect in detail.

Exploring NASDAQ:GOOG's Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:GOOG scores a 7 out of 10:

The Earnings Per Share has grown by an impressive 44.72% over the past year.
The Earnings Per Share has been growing by 19.55% on average over the past years. This is quite good.
The Revenue has grown by 14.38% 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.
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.

How We Gauge 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 5 out of 10:

GOOG's Price/Earnings ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 68.06% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, GOOG is valued a bit cheaper than 65.28% of the companies in the same industry.
Based on the Enterprise Value to EBITDA ratio, GOOG is valued a bit cheaper than 68.06% 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.
GOOG has an outstanding profitability rating, which may justify a higher PE ratio.
GOOG's earnings are expected to grow with 22.15% in the coming years. This may justify a more expensive valuation.

Analyzing Health Metrics

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

GOOG has an Altman-Z score of 14.40. 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 14.40, GOOG belongs to the top of the industry, outperforming 94.44% 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.
The Debt to FCF ratio of GOOG (0.26) is better than 80.56% 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.

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:

GOOG has a better Return On Assets (21.91%) than 97.22% of its industry peers.
With an excellent Return On Equity value of 30.01%, GOOG belongs to the best of the industry, outperforming 97.22% of the companies in the same industry.
GOOG's Return On Invested Capital of 26.84% is amongst the best of the industry. GOOG outperforms 97.22% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GOOG is significantly above the industry average of 10.96%.
The last Return On Invested Capital (26.84%) for GOOG is above the 3 year average (22.84%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 27.74%, GOOG belongs to the best of the industry, outperforming 94.44% of the companies in the same industry.
GOOG's Operating Margin of 32.02% is amongst the best of the industry. GOOG outperforms 97.22% of its industry peers.
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.

Check the latest full fundamental report of GOOG for a complete fundamental analysis.

Keep in mind

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.