Thinking of Investing in GOOG? What Our Analysts Know.

Alphabet logged a 1.6% change during today's morning session, and is now trading at a price of $90.71 per share. The S&P 500 index moved 0.4% and the Nasdaq posted a 0.6% change. GOOG's trading volume is 5,457,311 compared to the stock's average volume of 27,169,020.

Shares of Alphabet have a 50-day average price of $92.9282 as of January 2022. Alphabet Inc. provides various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. The large-cap Communication Services company has 174,014 full time employees and is based in Mountain View, CA. Alphabet has not offered any dividends in the last year.

Snapshot of the Company's Consistent Operating Margins with a Positive Growth Rate:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $161,857 $182,527 $257,637
Revenue Growth n/a 12.77% 41.15%
Gross Margins 55.6% 53.6% 56.9%
Gross Margins Growth n/a -3.6% 6.16%
Operating Margins 22.2% 22.6% 30.6%
Operating Margins Growth n/a 1.8% 35.4%
Earnings Per Share $2.46 $2.93 $5.61
EPS Growth n/a 19.11% 91.47%
Free Cash Flow (MM) $30,972 $42,843 $67,012
FCF Growth n/a 38.33% 56.41%
Capital Expenditures (MM) -$23,548 -$22,281 -$24,640
Net Debt / EBITDA -0.27 -0.19 -0.06

The Market Is Undervaluing Alphabet:

Compared to the Communication Services sector's average of 18.65, Alphabet has a trailing twelve month P/E ratio of 1.2 and, according to its EPS guidance of 94.63, an expected P/E ratio of 1.0. Alphabet's PEG ratio is 0.0 based on its 565.67% average growth rate of historical and projected earnings per share. This suggests that company's shares are undervalued.

Alphabet is undervalued in terms of its assets because its P/B ratio is 0.3 compared to its sector average of 2.62. The company's shares are currently trading -46.1% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 3.67 * 342.743) = $168.23

Alphabet Is the Subject of Mixed Market Indicators:

10 analysts are following Alphabet and have set target prices ranging from $115 to $160 per share. On average, they have given the company a rating of strong buy. At the current price of $90.71, GOOG is trading -31.36% away from its average analyst target price of $132.15 per share, implying an analyst consensus of strong upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.