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

Last update: Oct 24, 2024

Our stock screener has singled out ALPHABET INC-CL A (NASDAQ:GOOGL) as an attractive growth opportunity. NASDAQ:GOOGL is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this 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 47.67% over the past year.
Measured over the past years, GOOGL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 19.55% on average per year.
Looking at the last year, GOOGL shows a quite strong growth in Revenue. The Revenue has grown by 13.38% in the last year.
The Revenue has been growing by 17.57% on average over the past years. This is quite good.
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.
The Revenue is expected to grow by 10.62% on average over the next years. This is quite good.

Analyzing Valuation Metrics

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:GOOGL has received a 6 out of 10:

70.00% of the companies in the same industry are more expensive than GOOGL, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of GOOGL to the average of the S&P500 Index (30.80), we can say GOOGL is valued slightly cheaper.
Based on the Price/Forward Earnings ratio, GOOGL is valued a bit cheaper than 67.14% of the companies in the same industry.
70.00% of the companies in the same industry are more expensive than GOOGL, based on the Enterprise Value to EBITDA ratio.
GOOGL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. GOOGL is cheaper than 64.29% of the companies in the same industry.
GOOGL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of GOOGL may justify a higher PE ratio.
A more expensive valuation may be justified as GOOGL's earnings are expected to grow with 21.32% in the coming years.

Deciphering NASDAQ:GOOGL's Health Rating

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:GOOGL has earned a 8 out of 10:

An Altman-Z score of 13.15 indicates that GOOGL is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 13.15, GOOGL belongs to the top of the industry, outperforming 91.43% of the companies in the same industry.
GOOGL has a debt to FCF ratio of 0.23. This is a very positive value and a sign of high solvency as it would only need 0.23 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.23, GOOGL belongs to the top of the industry, outperforming 84.29% of the companies in the same industry.
A Debt/Equity ratio of 0.04 indicates that GOOGL is not too dependend on debt financing.
GOOGL has a Current Ratio of 2.08. This indicates that GOOGL is financially healthy and has no problem in meeting its short term obligations.
A Quick Ratio of 2.08 indicates that GOOGL has no problem at all paying its short term obligations.

What does the Profitability looks like for NASDAQ:GOOGL

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:GOOGL, the assigned 9 is a significant indicator of profitability:

The Return On Assets of GOOGL (21.13%) is better than 97.14% of its industry peers.
GOOGL's Return On Equity of 29.15% is amongst the best of the industry. GOOGL outperforms 95.71% of its industry peers.
Looking at the Return On Invested Capital, with a value of 25.85%, GOOGL belongs to the top of the industry, outperforming 98.57% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for GOOGL is significantly above the industry average of 10.42%.
The 3 year average ROIC (22.84%) for GOOGL is below the current ROIC(25.85%), indicating increased profibility in the last year.
GOOGL has a better Profit Margin (26.70%) than 95.71% of its industry peers.
With an excellent Operating Margin value of 30.77%, GOOGL belongs to the best of the industry, outperforming 98.57% of the companies in the same industry.
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.

For an up to date full fundamental analysis you can check the fundamental report of GOOGL

Keep in mind

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.