In the world of growth stocks, ALPHABET INC-CL C (NASDAQ:GOOG) shines as a value proposition.

Our stock screener has spotted ALPHABET INC-CL C (NASDAQ:GOOG) as a growth stock which is not overvalued. GOOG is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Growth Assessment of GOOG

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. GOOG was assigned a score of 7 for growth:

• The Earnings Per Share has grown by an impressive 38.79% over the past year.
• The Earnings Per Share has been growing by 25.25% on average over the past years. This is a very strong growth
• The Revenue has grown by 13.87% in the past year. This is quite good.
• The Revenue has been growing by 16.68% 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 15.30% yearly.
• GOOG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.97% yearly.

Valuation Analysis for GOOG

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. GOOG has earned a 5 for valuation:

• Based on the Price/Earnings ratio, GOOG is valued a bit cheaper than 70.42% of the companies in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 28.81, GOOG is valued a bit cheaper.
• GOOG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GOOG is cheaper than 63.38% 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 76.06% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, GOOG is valued a bit cheaper than the industry average as 66.20% of the companies are valued more expensively.
• GOOG has an outstanding profitability rating, which may justify a higher PE ratio.
• GOOG's earnings are expected to grow with 14.36% in the coming years. This may justify a more expensive valuation.

Evaluating Health: 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. GOOG has earned a 9 out of 10:

• GOOG has an Altman-Z score of 12.18. This indicates that GOOG is financially healthy and has little risk of bankruptcy at the moment.
• GOOG's Altman-Z score of 12.18 is amongst the best of the industry. GOOG outperforms 92.96% of its industry peers.
• GOOG has a debt to FCF ratio of 0.17. This is a very positive value and a sign of high solvency as it would only need 0.17 years to pay back of all of its debts.
• The Debt to FCF ratio of GOOG (0.17) is better than 80.28% of its industry peers.
• A Debt/Equity ratio of 0.03 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.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of GOOG, the assigned 9 is noteworthy for profitability:

• Looking at the Return On Assets, with a value of 22.24%, GOOG belongs to the top of the industry, outperforming 94.37% of the companies in the same industry.
• GOOG has a Return On Equity of 30.80%. This is amongst the best in the industry. GOOG outperforms 94.37% of its industry peers.
• With an excellent Return On Invested Capital value of 27.32%, GOOG belongs to the best of the industry, outperforming 97.18% 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 11.32%.
• 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.
• GOOG has a Profit Margin of 28.60%. This is amongst the best in the industry. GOOG outperforms 92.96% of its industry peers.
• GOOG's Profit Margin has improved in the last couple of years.
• GOOG has a Operating Margin of 32.79%. This is amongst the best in the industry. GOOG outperforms 97.18% 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

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.