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

Last update: Dec 10, 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.

Growth Analysis for NASDAQ:GOOGL

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:GOOGL has achieved a 7 out of 10:

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.
Measured over the past years, GOOGL shows a quite strong growth in Revenue. The Revenue has been growing by 17.57% on average per year.
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

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:

Based on the Price/Earnings ratio, GOOGL is valued a bit cheaper than the industry average as 73.61% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.37, GOOGL is valued a bit cheaper.
GOOGL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GOOGL is cheaper than 69.44% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of GOOGL to the average of the S&P500 Index (23.84), 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 70.83% of the companies in the same industry.
61.11% of the companies in the same industry are more expensive than GOOGL, based on the Price/Free Cash Flow ratio.
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.
GOOGL's earnings are expected to grow with 22.15% in the coming years. This may justify a more expensive valuation.

What does the Health looks like 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 9 out of 10:

GOOGL has an Altman-Z score of 13.69. This indicates that GOOGL is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of GOOGL (13.69) is better than 93.06% of its industry peers.
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.
The Debt to FCF ratio of GOOGL (0.26) is better than 81.94% of its industry peers.
A Debt/Equity ratio of 0.04 indicates that GOOGL is not too dependend on debt financing.
The current and quick ratio evaluation for GOOGL 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.

Analyzing Profitability Metrics

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:

With an excellent Return On Assets value of 21.91%, GOOGL belongs to the best of the industry, outperforming 98.61% of the companies in the same industry.
GOOGL has a Return On Equity of 30.01%. This is amongst the best in the industry. GOOGL outperforms 98.61% of its industry peers.
GOOGL has a Return On Invested Capital of 26.84%. This is amongst the best in the industry. GOOGL outperforms 98.61% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GOOGL is significantly above the industry average of 10.96%.
The 3 year average ROIC (22.84%) for GOOGL is below the current ROIC(26.84%), indicating increased profibility in the last year.
GOOGL's Profit Margin of 27.74% is amongst the best of the industry. GOOGL outperforms 95.83% of its industry peers.
Looking at the Operating Margin, with a value of 32.02%, GOOGL belongs to the top of the industry, outperforming 98.61% 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 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.