The Most Important Facts About Alphabet

Now trading at a price of $141.9, Alphabet has moved 0.6% so far today.

Alphabet returned gains of 41.0% last year, with its stock price reaching a high of $142.38 and a low of $83.45. Over the same period, the stock outperformed the S&P 500 index by 22.0%. More recently, the company's 50-day average price was $134.62. 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:

2018-02-06 2019-02-06 2020-02-04 2021-02-03 2022-02-02 2023-02-03
Revenue (MM) $110,855 $136,819 $161,857 $182,527 $257,637 $282,836
Gross Margins 59.0% 56.0% 56.0% 54.0% 56.0% 55.0%
Operating Margins 26% 24% 22% 23% 31% 26%
Net Margins 11.0% 22.0% 21.0% 22.0% 30.0% 21.0%
Net Income (MM) $12,662 $30,736 $34,343 $40,269 $76,033 $59,972
Earnings Per Share $0.84 $2.05 $2.3 $2.75 $5.62 $4.42
EPS Growth n/a 144.05% 12.2% 19.57% 104.36% -21.35%
Diluted Shares (MM) 15,015 15,003 14,902 14,664 13,530 13,553
Free Cash Flow (MM) $50,176 $73,110 $78,068 $87,405 $116,292 $122,980
Capital Expenditures (MM) -$13,085 -$25,139 -$23,548 -$22,281 -$24,640 -$31,485
Net Current Assets (MM) $79,515 $80,512 $78,111 $77,224 $80,510 $55,675
Long Term Debt (MM) $3,969 $4,012 $4,554 $13,932 $14,817 $14,701

Alphabet benefits from exceptional EPS growth, a pattern of improving cash flows, and an excellent current ratio. The company's financial statements show healthy debt levels and average operating margins with a stable trend. However, the firm has slimmer gross margins than its peers. Finally, we note that Alphabet has weak revenue growth and a flat capital expenditure trend.

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 $6.66, the company has a forward P/E ratio of 20.2. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 31.9%. On this basis, Alphabet's PEG ratio is 0.89. Using instead the 10.9% weighted average of Alphabet's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 2.62, which suggests that its shares may be overpriced. The market is placing a fair value on Alphabet's equity, since its P/B ratio of 6.71 is comparable to its sector average of 6.23. The company's shares are currently trading 227.3% above their Graham number.

Analysts Give Alphabet No Average Rating Visible In Our Data:

The 10 analysts following Alphabet have set target prices ranging from $120.0 to $160.0 per share, for an average of $143.5 with a buy rating. As of April 2023, the company is trading -6.2% 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 $58,665,557,960.

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.