Alphabet logged a 5.6% change during today's morning session, and is now trading at a price of $129.66 per share.
The company's 50-day average price was $122.74. Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. Based in Mountain View, CA, the large-cap Technology company has 190,711 full time employees. Alphabet has not offered a dividend during the last year.
The Company Has a Positive Net Current Asset Value:
| 2020-02-04 | 2021-02-03 | 2022-02-02 | 2023-02-03 | |
|---|---|---|---|---|
| Revenue (MM) | $161,857 | $182,527 | $257,637 | $282,836 |
| Gross Margins | 55.6% | 53.6% | 56.9% | 55.4% |
| Operating Margins | 22.2% | 22.6% | 30.6% | 26.5% |
| Net Margins | 21.22% | 22.06% | 29.51% | 21.2% |
| Net Income (MM) | $34,343 | $40,269 | $76,033 | $59,972 |
| Net Interest Expense (MM) | n/a | n/a | n/a | n/a |
| Depreciation & Amort. (MM) | -$10,856 | -$12,905 | -$11,555 | -$15,287 |
| Earnings Per Share | $2.3 | $2.75 | $5.62 | $4.39 |
| EPS Growth | n/a | 19.57% | 104.36% | -21.89% |
| Diluted Shares (MM) | 14,902 | 14,664 | 13,530 | 10,959 |
| Free Cash Flow (MM) | $78,068 | $87,405 | $116,292 | $122,980 |
| Capital Expenditures (MM) | -$23,548 | -$22,281 | -$24,640 | -$31,485 |
| Net Current Assets (MM) | $78,111 | $77,224 | $80,510 | $55,675 |
| Current Ratio | 3.37 | 3.07 | 2.93 | 2.38 |
| Long Term Debt (MM) | $4,554 | $13,932 | $14,817 | $14,701 |
| LT Debt to Equity | 0.02 | 0.06 | 0.06 | 0.06 |
Alphabet has growing revenues and increasing reinvestment in the business, a pattern of improving cash flows, and an excellent current ratio. The company also benefits from healthy debt levels, average operating margins with a stable trend, and a strong EPS growth trend. However, the firm has slimmer gross margins than its peers.
Alphabet's Valuation Is in Line With Its Sector Averages:
Alphabet has a trailing twelve month P/E ratio of 28.0, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $5.65, the company has a forward P/E ratio of 21.7. According to the 19.7% compound average growth rate of Alphabet's historical and projected earnings per share, the company's PEG ratio is 1.42. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 10.2%. On this basis, the company's PEG ratio is 2.75. This suggests that these shares are overvalued. The market is placing a fair value on Alphabet's equity, since its P/B ratio of 6.32 is comparable to its sector average of 6.23. The company's shares are currently trading 211.3% above their Graham number.
There's an Analyst Consensus of Little Upside Potential for Alphabet:
The 9 analysts following Alphabet have set target prices ranging from $108.47 to $131.07 per share, for an average of $119.22 with a buy rating. As of April 2023, the company is trading 3.0% away from its average target price, indicating that there is an analyst consensus of little upside potential.
The largest shareholder is Vanguard Group Inc, whose 7% stake in the company is worth $54,352,348,345.
