For those who appreciate growth without the sticker shock, ALPHABET INC-CL A (NASDAQ:GOOGL) is worth considering.

Discover ALPHABET INC-CL A (NASDAQ:GOOGL), an undervalued growth gem identified by our stock screener. NASDAQ:GOOGL is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Looking at the Growth

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 38.79%, which is quite impressive.
• Measured over the past years, GOOGL shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.25% on average per year.
• GOOGL shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.87%.
• GOOGL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.68% yearly.
• The Earnings Per Share is expected to grow by 16.13% on average over the next years. This is quite good.
• The Revenue is expected to grow by 10.86% on average over the next years. This is quite good.

What does the Valuation looks like for NASDAQ:GOOGL

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. NASDAQ:GOOGL has earned a 5 for valuation:

• Compared to the rest of the industry, the Price/Earnings ratio of GOOGL indicates a somewhat cheap valuation: GOOGL is cheaper than 67.61% of the companies listed in the same industry.
• The average S&P500 Price/Earnings ratio is at 29.71. GOOGL is valued slightly cheaper when compared to this.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of GOOGL indicates a somewhat cheap valuation: GOOGL is cheaper than 66.20% of the companies listed in the same industry.
• Based on the Enterprise Value to EBITDA ratio, GOOGL is valued a bit cheaper than the industry average as 73.24% of the companies are valued more expensively.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of GOOGL indicates a somewhat cheap valuation: GOOGL is cheaper than 63.38% of the companies listed in the same industry.
• GOOGL has an outstanding profitability rating, which may justify a higher PE ratio.
• GOOGL's earnings are expected to grow with 14.36% in the coming years. This may justify a more expensive valuation.

Unpacking NASDAQ:GOOGL's Health Rating

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 12.70. This indicates that GOOGL is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 12.70, GOOGL belongs to the best of the industry, outperforming 90.14% of the companies in the same industry.
• GOOGL 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.
• GOOGL has a Debt to FCF ratio of 0.17. This is amongst the best in the industry. GOOGL outperforms 80.28% of its industry peers.
• GOOGL has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
• The Debt to Equity ratio of GOOGL (0.03) is better than 60.56% of its industry peers.
• 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.

A Closer Look at Profitability for NASDAQ:GOOGL

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:GOOGL scores a 9 out of 10:

• With an excellent Return On Assets value of 22.24%, GOOGL belongs to the best of the industry, outperforming 95.77% of the companies in the same industry.
• GOOGL has a Return On Equity of 30.80%. This is amongst the best in the industry. GOOGL outperforms 95.77% of its industry peers.
• GOOGL has a Return On Invested Capital of 27.32%. This is amongst the best in the industry. GOOGL outperforms 98.59% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for GOOGL is significantly above the industry average of 11.30%.
• The last Return On Invested Capital (27.32%) for GOOGL is above the 3 year average (24.15%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 28.60%, GOOGL belongs to the top of the industry, outperforming 94.37% of the companies in the same industry.
• In the last couple of years the Profit Margin of GOOGL has grown nicely.
• GOOGL has a Operating Margin of 32.79%. 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

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.