Alphabet Class C (GOOG) AI Stock Analysis

• Market Cap: $1.93T
• Dividend Yield: 0.5%
• Average Volume (3M): 25.69M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.97
• Revenue Growth: 13.89%
• EPS Growth: 38.99%
• Country: US
• Employees: 183,323
• Sector: Communication Services
• Sector Strength: 79
• Industry: Internet Content & Information
• EPS (TTM): 8.05
• Shares Outstanding: 5,497,000,000
• 10 Day Avg. Volume: 32,645,006
• 30 Day Avg. Volume: 25,690,264
• PEG Ratio: 0.51
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.79
• Price to Cash Flow (P/CF): 13.00
• P/FCF Ratio: 12.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $207.00
• Price Target Upside: 29.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

Alphabet showcases strong financial performance, driven by impressive revenue growth and operational efficiency. While the technical analysis suggests caution, the company's fair valuation and positive earnings call sentiment underscore its growth potential. However, challenges like network revenue decline and capacity constraints in Cloud should be monitored.

Positive Factors

Advertising Business

Google Search is well-positioned due to its direct response advertising business, which is typically the last area to be cut in a softer macro environment.

AI and Cloud Growth

Gemini adoption is accelerating, with 4.4 million developers using Gemini models, indicating strong market interest.

Cybersecurity and Cloud Offering

The acquisition of Wiz will enhance Google's existing cybersecurity offerings and enable organizations to operate more safely and efficiently in multicloud environments.

Negative Factors

Acquisition Uncertainty

The stock is trading down about 3% following the announcement of this acquisition, indicating investor uncertainty or the need for time to digest such a large acquisition.

Consumer Sentiment

Consumer sentiment has weakened, with negative indicators such as lower consumer sentiment and challenges to near-term demand affecting estimates.

YouTube Growth

YouTube experienced a deceleration in growth, with a decrease in mobile viewing share among younger audiences, as TikTok gained popularity.

Alphabet Class C Business Overview & Revenue Model

Company Description

Alphabet Inc., through its Class C shares (GOOG), operates as a global technology leader, primarily known for its search engine, Google. The company is headquartered in Mountain View, California, and functions through various segments including Google Services, Google Cloud, and Other Bets. Google Services encompasses core products such as Search, YouTube, Google Maps, Google Play, and the Android operating system. Google Cloud provides infrastructure and data analytics services, while Other Bets focuses on emerging businesses like Waymo, Verily, and more. Alphabet's mission is to organize the world's information and make it universally accessible and useful.

How the Company Makes Money

Alphabet Inc. generates revenue primarily through advertising services, which constitute the majority of its total earnings. Advertising revenue comes from Google Search, YouTube ads, and partner sites in the Google Network through AdSense and AdMob. The company leverages its vast data analytics capabilities to provide targeted advertising, enhancing ad performance and user engagement. Additionally, Alphabet earns revenue from its Google Cloud segment by offering cloud computing services, including storage, data management, and machine learning capabilities. Other revenue streams include hardware sales, such as Pixel phones and Nest products, as well as digital content and apps sold on the Google Play Store. Strategic partnerships and investments in various sectors also contribute to Alphabet's financial success.

Alphabet Class C Financial Statement Overview

Summary

Alphabet demonstrates exceptional financial health characterized by strong revenue and profit growth, efficient leverage management, and robust cash flow generation. The company's financial stability and profitability make it well-positioned to capitalize on future opportunities and withstand potential market fluctuations.

Income Statement

Alphabet exhibits strong financial performance with substantial revenue growth of 13.82% in TTM (Trailing-Twelve-Months) over the previous year. The gross profit margin stands at 58.23%, and net profit margin is impressive at 28.62%. EBIT and EBITDA margins are also robust at 32.13% and 37.11% respectively, indicating high operational efficiency and profitability.

Balance Sheet

The balance sheet is healthy with a low debt-to-equity ratio of 0.07, suggesting minimal leverage risk. Return on equity is strong at 30.79%, reflecting efficient use of equity capital. The equity ratio is 72.20%, showing a solid equity base and financial stability.

Cash Flow

Cash flow analysis reveals a positive trajectory with a 4.70% growth in free cash flow. The operating cash flow to net income ratio is 1.25, indicating strong cash generation relative to earnings. Free cash flow to net income ratio is 0.73, suggesting effective cash utilization.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
350.02B	307.39B	282.84B	257.64B	182.53B
	Gross Profit
203.71B	174.06B	156.63B	146.70B	97.80B
	EBIT
112.39B	84.29B	74.84B	78.71B	41.22B
	EBITDA
112.39B	97.97B	91.33B	103.52B	61.91B
	Net Income Common Stockholders
100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
95.66B	110.92B	113.76B	139.65B	136.69B
	Total Assets
450.26B	402.39B	365.26B	359.27B	319.62B
	Total Debt
25.46B	27.12B	29.68B	26.21B	25.08B
	Net Debt
2.00B	3.07B	7.80B	5.26B	-1.39B
	Total Liabilities
125.17B	119.01B	109.12B	107.63B	97.07B
	Stockholders Equity
325.08B	283.38B	256.14B	251.63B	222.54B
Cash Flow		Free Cash Flow
72.76B	69.50B	60.01B	67.01B	42.84B
	Operating Cash Flow
125.30B	101.75B	91.50B	91.65B	65.12B
	Investing Cash Flow
-45.54B	-27.06B	-20.30B	-35.52B	-32.77B
	Financing Cash Flow
-79.73B	-72.09B	-69.76B	-61.36B	-24.41B

Alphabet Class C Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 159.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOG, the sentiment is Negative. The current price of 159.4 is below the 20-day moving average (MA) of 160.14, below the 50-day MA of 172.82, and below the 200-day MA of 174.96, indicating a bearish trend. The MACD of -5.11 indicates Negative momentum. The RSI at 47.06 is Neutral, neither overbought nor oversold. The STOCH value of 80.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GOOG.

Alphabet Class C Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
META	84 Outperform	$1.38T	22.79	37.14%	0.37%	21.94%	61.97%
GOOG	83 Outperform	$1.93T	19.82	32.91%	0.50%	13.89%	38.99%
GOOGL	82 Outperform	$1.93T	19.54	32.91%	0.51%	13.89%	38.99%
BIDU	76 Outperform	$28.60B	9.02	9.14%	―	-2.60%	16.71%
PINS	76 Outperform	$17.85B	9.75	47.49%	―	19.35%	―
SPOT	75 Outperform	$109.16B	88.97	28.91%	―	18.36%	―
Sector *	58 Neutral	$26.25B	2.79	-10.85%	4.33%	2.15%	-44.22%