While growth is established for NASDAQ:GOOG, the stock's valuation remains reasonable.

Here's ALPHABET INC-CL C (NASDAQ:GOOG) for you, a growth stock our stock screener believes is undervalued. NASDAQ:GOOG is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Growth Assessment of 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 38.79%, which is quite impressive.
• Measured over the past years, GOOG shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.25% on average per year.
• GOOG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.87%.
• Measured over the past years, GOOG shows a quite strong growth in Revenue. The Revenue has been growing by 16.68% 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 16.13% on average per year.
• The Revenue is expected to grow by 10.86% on average over the next years. This is quite good.

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 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 69.70% of the companies listed in the same industry.
• The average S&P500 Price/Earnings ratio is at 28.99. GOOG is valued slightly cheaper when compared to this.
• GOOG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 65.15% of the companies in the same industry.
• GOOG is valuated cheaply when we compare the Price/Forward Earnings ratio to 96.58, which is the current average of the S&P500 Index.
• GOOG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 66.67% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, GOOG is valued a bit cheaper than the industry average as 62.12% of the companies are valued more expensively.
• 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 14.64% in the coming years.

A Closer Look at Health for NASDAQ:GOOG

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 8 for health:

• GOOG has an Altman-Z score of 13.46. This indicates that GOOG is financially healthy and has little risk of bankruptcy at the moment.
• GOOG's Altman-Z score of 13.46 is amongst the best of the industry. GOOG outperforms 90.91% of its industry peers.
• The Debt to FCF ratio of GOOG is 0.17, which is an excellent value as it means it would take GOOG, only 0.17 years of fcf income to pay off all of its debts.
• GOOG has a Debt to FCF ratio of 0.17. This is in the better half of the industry: GOOG outperforms 78.79% of its industry peers.
• GOOG has a Debt/Equity ratio of 0.03. 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.

Exploring NASDAQ:GOOG's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:GOOG has achieved a 9:

• GOOG's Return On Assets of 22.24% is amongst the best of the industry. GOOG outperforms 93.94% of its industry peers.
• GOOG has a better Return On Equity (30.80%) than 95.45% of its industry peers.
• With an excellent Return On Invested Capital value of 27.32%, GOOG belongs to the best of the industry, outperforming 95.45% 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 12.54%.
• The last Return On Invested Capital (27.32%) for GOOG is above the 3 year average (24.15%), which is a sign of increasing profitability.
• The Profit Margin of GOOG (28.60%) is better than 92.42% of its industry peers.
• In the last couple of years the Profit Margin of GOOG has grown nicely.
• Looking at the Operating Margin, with a value of 32.79%, GOOG belongs to the top of the industry, outperforming 96.97% of the companies in the same industry.
• In the last couple of years the Operating Margin of GOOG has grown nicely.

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

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.