Now trading at a price of $284.49, Alphabet has moved 2.9% so far today.
Alphabet returned gains of 57.7% last year, with its stock price reaching a high of $293.95 and a low of $140.53. Over the same period, the stock outperformed the S&P 500 index by 43.4%. More recently, the company's 50-day average price was $257.24. 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 190,167 full time employees. Alphabet has offered a 0.4% dividend yield over the last 12 months.
Growing Revenues and Healthy Leverage Levels:
| 2021 | 2022 | 2023 | 2023 | 2024 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $257,637 | $282,836 | $307,394 | $307,394 | $350,018 | $350,018 |
| Operating Margins | 31% | 26% | 27% | 27% | 32% | 32% |
| Net Margins | 30% | 21% | 24% | 24% | 28% | 28% |
| Net Income (M) | $76,033 | $59,972 | $73,795 | $73,795 | $100,118 | $100,118 |
| Net Interest Expense (M) | $346 | $357 | $308 | $308 | $4,482 | $4,482 |
| Depreciation & Amort. (M) | $10,273 | $13,475 | $11,946 | $11,946 | $15,311 | $15,311 |
| Diluted Shares (M) | 13,483 | 13,159 | 12,722 | 12,722 | 12,447 | 12,447 |
| Earnings Per Share | $5.64 | $4.56 | $5.8 | $5.8 | $8.04 | $8.04 |
| EPS Growth | n/a | -19.15% | 27.19% | 0.0% | 38.62% | 0.0% |
| Avg. Price | $125.53 | $126.61 | $139.69 | $140.93 | $284.29 | $284.29 |
| P/E Ratio | 22.26 | 27.89 | 24.25 | 24.47 | 35.32 | 35.32 |
| Free Cash Flow (M) | $67,012 | $60,010 | $69,495 | $69,495 | $72,764 | $72,764 |
| CAPEX (M) | $24,640 | $31,485 | $32,251 | $32,251 | $52,535 | $52,535 |
| EV / EBITDA | 18.95 | 18.87 | 18.46 | 18.63 | 27.59 | 27.59 |
| Total Debt (M) | $14,817 | $14,701 | $11,870 | $11,870 | $12,000 | $12,000 |
| Net Debt / EBITDA | -0.07 | -0.08 | -0.13 | -0.13 | -0.09 | -0.09 |
| Current Ratio | 2.93 | 2.38 | 2.1 | 2.1 | 1.84 | 1.84 |
Alphabet has growing revenues and increasing reinvestment in the business, strong operating margins with a stable trend, and positive EPS growth. The company also benefits from generally positive cash flows, a decent current ratio of 1.84, and healthy leverage levels.
a Very Low P/E Ratio but Its Shares Are Expensive:
Alphabet has a trailing twelve month P/E ratio of 25.4, compared to an average of 30.44 for the Technology sector. Based on its EPS guidance of $8.96, the company has a forward P/E ratio of 28.7. The 6.8% compound average growth rate of Alphabet's historical and projected earnings per share yields a PEG ratio of 3.72. This suggests that these shares are overvalued. Furthermore, Alphabet is likely overvalued compared to the book value of its equity, since its P/B ratio of 8.88 is higher than the sector average of 4.19. The company's shares are currently trading 313.9% below their Graham number. Ultimately, Alphabet's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Alphabet Has an Analyst Consensus of Some Upside Potential:
The 54 analysts following Alphabet have set target prices ranging from $185.0 to $360.0 per share, for an average of $318.24 with a buy rating. The company is trading -10.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Alphabet has a very low short interest because 1.2% of the company's shares are sold short. Institutions own 81.3% of the company's shares, and the insider ownership rate stands at 0.57%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $146,921,335,461.
