Alphabet logged a 1.2% change Friday, and is now trading at a price of $109.46 per share.
Alphabet shares moved -14.5% over the last 52 weeks, with a high of $131.92 and a low of $83.45. During this time, the stock lagged the S&P 500 index by -9.0%. As of January 2022, the company's 50-day average price is $99.29. Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. The large-cap Technology company has 190,234 full time employees and is based in Mountain View, CA. Alphabet has not offered any dividends in the last year.
Good EPS Growth with Low Leverage Levels:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $161,857 | $182,527 | $257,637 | $282,836 |
| Revenue Growth | n/a | 12.77% | 41.15% | 9.78% |
| Gross Margins | 55.6% | 53.6% | 56.9% | 55.4% |
| Gross Margins Growth | n/a | -3.6% | 6.16% | -2.64% |
| Operating Margins | 22.2% | 22.6% | 30.6% | 26.5% |
| Operating Margins Growth | n/a | 1.8% | 35.4% | -13.4% |
| Net Margins | 21.22% | 22.06% | 29.51% | 21.2% |
| Net Margins Growth | n/a | 3.96% | 33.77% | -28.16% |
| Earnings Per Share | $2.46 | $2.93 | $5.61 | $4.61 |
| EPS Growth | n/a | 19.11% | 91.47% | -17.83% |
| Diluted Shares (MM) | 13,971 | 13,741 | 13,553 | 11,065 |
| Free Cash Flow (MM) | $30,972 | $42,843 | $67,012 | $60,010 |
| FCF Growth | n/a | 38.33% | 56.41% | -10.45% |
| Capital Expenditures (MM) | -$23,548 | -$22,281 | -$24,640 | -$31,485 |
| Net Debt / EBITDA | -0.26 | -0.2 | -0.04 | -0.05 |
Alphabet Is Currently Fairly Valued:
Compared to the Technology sector's average of 27.16, Alphabet has a trailing twelve month P/E ratio of 23.7 and, according to its EPS guidance of 6.05, an expected P/E ratio of 18.1. Alphabet's PEG ratio is 0.85 based on its 25.2% compound average growth rate of historical and projected earnings per share. This indicates that the company's shares are undervalued.
Furthermore, Alphabet is likely undervalued in terms of its equity because its P/B ratio is 5.5 compared to its sector average of 6.23. The company's shares are currently trading 161.7% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 3.9 * 19.935) = $41.82
Alphabet's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
Most of the Market Indicators on Alphabet Are Negative:
9 analysts are following Alphabet and have set target prices ranging from $119.0 to $135.0 per share. On average, they have given the company a rating of buy. At the current price of $109.46, GOOG is trading -12.51% away from its average analyst target price of $125.11 per share, implying an analyst consensus of some upside potential for the stock.
