Investors should take note of NASDAQ:GOOGL, a growth stock that remains attractively priced.

Last update: Nov 18, 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.

Analyzing Growth Metrics

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:GOOGL has earned a 7 for growth:

GOOGL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 44.72%, which is quite impressive.
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 14.38% in the last year.
The Revenue has been growing by 17.57% on average over the past years. This is quite good.
Based on estimates for the next years, GOOGL will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.96% on average per year.
The Revenue is expected to grow by 10.62% on average over the next years. This is quite good.

Exploring NASDAQ:GOOGL's Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:GOOGL has achieved a 6 out of 10:

GOOGL's Price/Earnings ratio is a bit cheaper when compared to the industry. GOOGL is cheaper than 70.42% of the companies in the same industry.
66.20% of the companies in the same industry are more expensive than GOOGL, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of GOOGL to the average of the S&P500 Index (23.40), we can say GOOGL is valued slightly cheaper.
GOOGL's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GOOGL is cheaper than 69.01% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GOOGL indicates a somewhat cheap valuation: GOOGL is cheaper than 61.97% of the companies listed in the same industry.
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 22.06% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for NASDAQ:GOOGL

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:GOOGL was assigned a score of 9 for health:

GOOGL has an Altman-Z score of 13.51. This indicates that GOOGL is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 13.51, GOOGL belongs to the best of the industry, outperforming 92.96% of the companies in the same industry.
The Debt to FCF ratio of GOOGL is 0.26, which is an excellent value as it means it would take GOOGL, only 0.26 years of fcf income to pay off all of its debts.
GOOGL has a better Debt to FCF ratio (0.26) than 81.69% of its industry peers.
GOOGL has a Debt/Equity ratio of 0.04. This is a healthy value indicating a solid balance between debt and equity.
GOOGL 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.

Evaluating Profitability: NASDAQ:GOOGL

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:GOOGL has achieved a 9:

With an excellent Return On Assets value of 21.91%, GOOGL belongs to the best of the industry, outperforming 98.59% of the companies in the same industry.
The Return On Equity of GOOGL (30.01%) is better than 98.59% of its industry peers.
GOOGL has a better Return On Invested Capital (26.84%) than 98.59% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GOOGL is significantly above the industry average of 11.22%.
The 3 year average ROIC (22.84%) for GOOGL is below the current ROIC(26.84%), indicating increased profibility in the last year.
The Profit Margin of GOOGL (27.74%) is better than 95.77% of its industry peers.
GOOGL has a Operating Margin of 32.02%. This is amongst the best in the industry. GOOGL outperforms 98.59% of its industry peers.
GOOGL's Operating Margin has improved in the last couple of years.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

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

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.