Now trading at a price of $127.7, Alphabet has moved -2.1% so far today.
Alphabet returned gains of 8.0% last year, with its stock price reaching a high of $134.07 and a low of $83.45. Over the same period, the stock outperformed the S&P 500 index by 4.0%. More recently, the company's 50-day average price was $124.97. 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 181,798 full time employees. Alphabet has not offered a dividend during the last year.
The Company Has a Positive Net Current Asset Value:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| 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) | $5,394 | $1,730 | $1,153 | $1,817 |
| Depreciation & Amort. (MM) | -$11,781 | -$13,697 | -$12,441 | -$15,928 |
| Earnings Per Share | $2.46 | $2.93 | $5.61 | $4.39 |
| EPS Growth | n/a | 19.11% | 91.47% | -21.75% |
| Diluted Shares (MM) | 13,971 | 13,741 | 13,553 | 10,881 |
| Free Cash Flow (MM) | $30,972 | $42,843 | $67,012 | $60,010 |
| 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 |
| Net Debt / EBITDA | -0.22 | -0.17 | -0.04 | -0.05 |
Alphabet has growing revenues and increasing reinvestment in the business, an excellent current ratio, and low leverage. The company also benefits from average operating margins with a stable trend, a strong EPS growth trend, and consistent free cash flow. 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 28.5, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $6.06, the company has a forward P/E ratio of 20.6. According to the 19.8% compound average growth rate of Alphabet's historical and projected earnings per share, the company's PEG ratio is 1.44. 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 2.8. This suggests that these shares are overvalued. In contrast, the market is likely undervaluing Alphabet in terms of its equity because its P/B ratio is 6.04 while the sector average is 6.23. The company's shares are currently trading 198.3% above their Graham number.
Alphabet Has an Analyst Consensus of Some Upside Potential:
The 10 analysts following Alphabet have set target prices ranging from $110.35 to $147.13 per share, for an average of $130.85 with a buy rating. As of April 2023, the company is trading -4.5% away from its average target price, indicating that there is an analyst consensus of some upside potential.
The largest shareholder is Vanguard Group Inc, whose 7% stake in the company is worth $52,794,868,885.
