NASDAQ:GOOG is showing decent growth, but is still valued reasonably.

Last update: Jan 22, 2025

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.

Understanding NASDAQ:GOOG's Growth Score

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 44.72%, 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 14.38% in the last year.
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 19.52% yearly.
Based on estimates for the next years, GOOG will show a quite strong growth in Revenue. The Revenue will grow by 11.47% on average per year.

Valuation Examination for NASDAQ:GOOG

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:GOOG was assigned a score of 5 for valuation:

65.67% of the companies in the same industry are more expensive than GOOG, based on the Price/Earnings ratio.
Based on the Price/Forward Earnings ratio, GOOG is valued a bit cheaper than the industry average as 61.19% of the companies are valued more expensively.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GOOG indicates a somewhat cheap valuation: GOOG is cheaper than 64.18% of the companies listed 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.
GOOG has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as GOOG's earnings are expected to grow with 22.12% in the coming years.

Evaluating Health: NASDAQ:GOOG

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:GOOG has earned a 9 out of 10:

An Altman-Z score of 15.23 indicates that GOOG is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 15.23, GOOG belongs to the top of the industry, outperforming 92.54% 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.
With an excellent Debt to FCF ratio value of 0.26, GOOG belongs to the best of the industry, outperforming 80.60% of the companies in the same industry.
GOOG has a Debt/Equity ratio of 0.04. This is a healthy value indicating a solid balance between debt and equity.
The current and quick ratio evaluation for GOOG is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Assessing Profitability for NASDAQ:GOOG

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:GOOG, the assigned 9 is a significant indicator of profitability:

With an excellent Return On Assets value of 21.91%, GOOG belongs to the best of the industry, outperforming 97.01% of the companies in the same industry.
GOOG's Return On Equity of 30.01% is amongst the best of the industry. GOOG outperforms 97.01% of its industry peers.
With an excellent Return On Invested Capital value of 26.84%, GOOG belongs to the best of the industry, outperforming 95.52% 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 12.59%.
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.
Looking at the Profit Margin, with a value of 27.74%, GOOG belongs to the top of the industry, outperforming 94.03% of the companies in the same industry.
The Operating Margin of GOOG (32.02%) is better than 97.01% of its industry peers.
In the last couple of years the Operating Margin of GOOG has grown nicely.

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.

Disclaimer

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.