Alphabet Class C (GOOG) AI Stock Analysis

• Market Cap: $2.32T
• Dividend Yield: 0.42%
• Average Volume (3M): 26.22M
• Price to Earnings (P/E): 20.4
• Beta (1Y): 1.05
• Revenue Growth: 13.19%
• EPS Growth: 34.51%
• Country: US
• Employees: 185,719
• Sector: Communication Services
• Sector Strength: 82
• Industry: Internet Content & Information
• EPS (TTM): 2.31
• Shares Outstanding: 5,459,000,000
• 10 Day Avg. Volume: 23,957,761
• 30 Day Avg. Volume: 26,223,031
• PEG Ratio: 1.84
• Price to Book (P/B): 6.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 31.12
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 7.67
• Enterprise Value/Gross Profit: 52.43
• Enterprise Value/Ebitda: 23.00
• 1Y Price Target: $219.00
• Price Target Upside: 14.35% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 89 Outperform
• Price Target: $229.00 ▲(19.58%Upside)

Alphabet's strong financial performance, driven by high profitability and robust cash flow, is the primary factor in its high score. Technical indicators support a bullish outlook, although caution is advised due to potential overbought conditions. The company's valuation is reasonable, and the earnings call further solidifies positive sentiment with growth in AI and cloud initiatives.

Positive Factors

Cloud Services

Google Cloud shows significant growth opportunities due to low enterprise cloud penetration and potential AI benefits.

Earnings

Alphabet reported strong better than expected 2Q results, including significant growth in search, YouTube, and cloud revenue.

Negative Factors

Advertising

Network ad revenue fell by 1.2% year-over-year, reflecting challenges in the advertising segment.

Legal Risks

There are medium to long term concerns over the effects of AI on search and potential unfavorable court rulings regarding monopoly concerns.

Alphabet Class C Business Overview & Revenue Model

Company Description

Alphabet Inc. Class C (GOOG) is a leading global technology conglomerate headquartered in Mountain View, California. As the parent company of Google, it operates across various sectors including internet services, advertising, cloud computing, hardware, software, and artificial intelligence. Alphabet's core products and services encompass the Google search engine, YouTube, the Android operating system, Google Cloud, and a suite of productivity tools such as Google Workspace. The company also engages in diverse ventures through its Other Bets segment, which explores innovative projects like self-driving cars with Waymo and life sciences research with Verily.

How the Company Makes Money

Alphabet Inc. primarily generates revenue through advertising, which accounts for the majority of its earnings. The company earns significant income from Google Ads, where businesses pay for ad placements on Google's search engine results pages and across its vast network of partner websites. YouTube also contributes to ad revenue through video advertisements. In addition to advertising, Alphabet earns money from its Google Cloud services, offering scalable and secure cloud solutions to businesses and organizations. The company's hardware products, such as Pixel phones and Google Nest smart home devices, contribute to its revenue streams. Furthermore, Alphabet's Other Bets segment, though not yet profitable, explores new technologies and potential future revenue sources. Strategic partnerships and collaborations with various industries enhance its earning potential and facilitate the development of innovative solutions.

Alphabet Class C Financial Statement Overview

Summary

Alphabet demonstrates strong financial performance with robust revenue growth, high profitability, and a solid balance sheet. The income statement shows a TTM gross profit margin of 58.95% and a net profit margin of 31.11%. The balance sheet reflects a low debt-to-equity ratio of 0.10 and a high return on equity of 31.85%. Cash flow is healthy with a free cash flow growth of 9.35% TTM.

Income Statement

Alphabet's income statement shows robust financial health with high profitability and significant growth. The TTM (Trailing-Twelve-Months) gross profit margin is 58.95%, indicating efficient cost management. A strong net profit margin of 31.11% highlights excellent profitability. Revenue growth is commendable, with a 6.1% increase from the previous year. EBIT and EBITDA margins are solid at 32.67% and 40.33% respectively, showcasing strong operational performance.

Balance Sheet

The balance sheet reflects a strong financial position with a low debt-to-equity ratio of 0.10, suggesting minimal leverage risks. The return on equity (ROE) is impressive at 31.85%, indicating effective use of equity capital. The equity ratio is high at 72.28%, pointing to a strong capital structure with substantial shareholder's equity relative to total assets.

Cash Flow

Alphabet's cash flow statement demonstrates strong cash generation and prudent capital deployment. The free cash flow in TTM grew by 9.35% compared to the previous period. The operating cash flow to net income ratio is 1.16, indicating healthy cash flow from operations relative to net income. The free cash flow to net income ratio is 0.58, showcasing good free cash flow relative to net income, supporting future growth and investment.

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
EBITDA	135.39B	97.97B	85.16B	103.52B	61.91B
Net Income	100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet
Total Assets	450.26B	402.39B	365.26B	359.27B	319.62B
Cash, Cash Equivalents and Short-Term Investments	95.66B	110.92B	113.76B	139.65B	136.69B
Total Debt	25.46B	27.12B	29.68B	28.39B	26.77B
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: Positive
• Last Price: 191.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOG, the sentiment is Positive. The current price of 191.51 is above the 20-day moving average (MA) of 182.30, above the 50-day MA of 175.69, and above the 200-day MA of 175.38, indicating a bullish trend. The MACD of 4.86 indicates Negative momentum. The RSI at 73.72 is Negative, neither overbought nor oversold. The STOCH value of 83.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GOOG.

Alphabet Class C Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOG	89 Outperform	$2.32T	20.40	34.83%	0.42%	13.19%	34.51%
GOOGL	85 Outperform	$2.32T	20.27	34.83%	0.53%	13.19%	34.51%
META	82 Outperform	$1.79T	27.83	39.83%	0.29%	19.37%	47.56%
PINS	80 Outperform	$25.57B	13.72	48.41%	―	17.81%	1175.52%
SPOT	76 Outperform	$135.42B	108.98	24.28%	―	16.07%	―
BIDU	76 Outperform	$33.34B	9.23	9.85%	―	-1.33%	32.92%
Sector *	62 Neutral	$41.97B	-1.66	-12.07%	3.33%	2.07%	-69.32%