Investors seeking growth at a reasonable cost should explore NASDAQ:GOOGL.

Last update: Jun 19, 2024

Here's ALPHABET INC-CL A (NASDAQ:GOOGL) for you, a growth stock our stock screener believes is undervalued. NASDAQ:GOOGL 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.

A Closer Look at Growth for NASDAQ:GOOGL

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:GOOGL scores a 7 out of 10:

The Earnings Per Share has grown by an impressive 45.21% over the past year.
GOOGL 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, GOOGL shows a quite strong growth in Revenue. The Revenue has grown by 11.78% in the last year.
GOOGL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.57% yearly.
GOOGL 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, GOOGL will show a quite strong growth in Revenue. The Revenue will grow by 10.62% on average per year.

Deciphering NASDAQ:GOOGL's Valuation Rating

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:GOOGL, the assigned 6 reflects its valuation:

67.16% of the companies in the same industry are more expensive than GOOGL, based on the Price/Earnings ratio.
Based on the Price/Forward Earnings ratio, GOOGL is valued a bit cheaper than the industry average as 65.67% of the companies are valued more expensively.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GOOGL indicates a somewhat cheap valuation: GOOGL is cheaper than 67.16% of the companies listed in the same industry.
67.16% of the companies in the same industry are more expensive than GOOGL, based on the Price/Free Cash Flow ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GOOGL has an outstanding profitability rating, which may justify a higher PE ratio.
GOOGL's earnings are expected to grow with 20.88% in the coming years. This may justify a more expensive valuation.

Health Examination for NASDAQ:GOOGL

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:GOOGL has earned a 8 out of 10:

GOOGL has an Altman-Z score of 13.90. This indicates that GOOGL is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 13.90, GOOGL belongs to the best of the industry, outperforming 94.03% of the companies in the same industry.
GOOGL has a debt to FCF ratio of 0.20. This is a very positive value and a sign of high solvency as it would only need 0.20 years to pay back of all of its debts.
GOOGL has a better Debt to FCF ratio (0.20) than 85.07% of its industry peers.
GOOGL has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
GOOGL has a Current Ratio of 2.15. This indicates that GOOGL is financially healthy and has no problem in meeting its short term obligations.
A Quick Ratio of 2.15 indicates that GOOGL has no problem at all paying its short term obligations.

Assessing Profitability for NASDAQ:GOOGL

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

Looking at the Return On Assets, with a value of 20.23%, GOOGL belongs to the top of the industry, outperforming 95.52% of the companies in the same industry.
GOOGL has a better Return On Equity (28.14%) than 94.03% of its industry peers.
GOOGL has a Return On Invested Capital of 24.32%. This is amongst the best in the industry. GOOGL outperforms 98.51% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GOOGL is significantly above the industry average of 10.07%.
The last Return On Invested Capital (24.32%) for GOOGL is above the 3 year average (22.54%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 25.90%, GOOGL belongs to the top of the industry, outperforming 92.54% of the companies in the same industry.
The Operating Margin of GOOGL (29.68%) is better than 97.01% of its industry peers.
In the last couple of years the Operating Margin of GOOGL has grown nicely.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

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

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.