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Alphabet Class C (GOOG)
NASDAQ:GOOG
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Alphabet Class C
(NASDAQ:GOOG)
Rating:84Outperform
Price Target:
$195.00
▲(12.08%Upside)
Positive Factors
Financial Performance
Alphabet's operating income increased by 20% year over year, primarily due to effective control in selling and marketing expenses.
Market Confidence
The company initiated a $70 billion share repurchase program, indicating confidence in its valuation and future performance.
Product Innovation
Google's product innovation is accelerating, with the company shipping faster than ever, and AI Mode in Search is rolling out to US users just 1 year after AI Overviews were introduced.
Negative Factors
Ad Business Challenges
Management noted several headwinds for ad businesses, including a decline in ad budget from certain APAC-based retailers.
Competition
Apple is considering adding AI providers as search options on Safari, which suggests increased competition for Google in the search market.
Regulatory Concerns
There is medium to long term concern over the effects of AI on search and potential regulatory challenges that could impact Google's dominance.
Alphabet Class C (GOOG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.05T
Dividend Yield0.47%
Average Volume (3M)26.33M
Price to Earnings (P/E)18.9
Beta (1Y)1.01
Revenue Growth13.02%
EPS Growth37.73%
CountryUS
Employees185,719
SectorCommunication Services
Sector Strength93
IndustryInternet Content & Information
Share Statistics
EPS (TTM)2.81
Shares Outstanding5,459,000,000
10 Day Avg. Volume31,808,057
30 Day Avg. Volume26,332,965
Financial Highlights & Ratios
PEG Ratio1.61
Price to Book (P/B)5.91
Price to Sales (P/S)0.00
P/FCF Ratio26.66
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue1.45
Enterprise Value/Gross Profit9.47
Enterprise Value/Ebitda3.81
Forecast
1Y Price Target
$201.14Price Target Upside15.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
Alphabet Class C Business Overview & Revenue Model
Company DescriptionAlphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.
How the Company Makes MoneyAlphabet 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 Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 7.75%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth across Alphabet's business segments, particularly in AI and cloud initiatives, with strong revenue and user engagement metrics. While there are concerns about network advertising declines and increasing depreciation expenses, the positive momentum in key areas like YouTube, Google Cloud, and AI developments suggest an overall positive sentiment.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Alphabet Inc. reported consolidated revenues of $90.2 billion, representing a 12% increase year-over-year, with a 14% increase in constant currency.
AI Initiatives Drive Growth
AI Overviews now has over 1.5 billion users per month, and Gemini 2.5 has been recognized as the best AI model in the industry. Active users in AI Studio and Gemini API have grown over 200% since the beginning of the year.
Strong Performance in Google Cloud
Google Cloud revenue increased by 28% to $12.3 billion, with an operating income increase to $2.2 billion and operating margin rising to 17.8%.
YouTube and Subscription Growth
YouTube Music and Premium reached over 125 million subscribers, and YouTube advertising revenues increased by 10% to $8.9 billion.
Waymo Expansion
Waymo is now serving over a quarter of a million paid passenger trips each week, a 5x increase from a year ago, with expansion plans in Atlanta and other cities.
Negative Updates
Network Advertising Decline
Network advertising revenues declined by 2% to $7.3 billion.
Increasing Depreciation Expenses
Depreciation expenses increased by over $1 billion year-over-year, with expectations for further acceleration throughout 2025.
Challenges in Ad Revenue Growth
Potential headwinds in ad revenue growth due to changes in the de minimis exemption impacting APAC-based retailers.
Company Guidance
During the first quarter of 2025 earnings call, Alphabet Inc. provided several forward-looking metrics and insights into its business operations across various segments. The company reported consolidated revenues of $90.2 billion, marking a 12% year-over-year increase, with Google Services contributing $77.3 billion driven by a 10% increase in both Search and YouTube advertising revenues. Google Cloud revenue surged by 28% to $12.3 billion, reflecting strong demand for AI and core products. Subscription platforms and device revenues grew 19% to $10.4 billion, attributed largely to YouTube subscriptions and Google One. Operating income rose by 20% to $31 billion, with an operating margin increase to 33.9%, benefiting from revenue growth and cost management. The company highlighted the successful deployment of its Gemini 2.5 AI model, which has enhanced performance across its product lines, including Search, where AI Overviews now serves over 1.5 billion users monthly. Alphabet anticipates continued investments in AI and cloud infrastructure, with approximately $75 billion planned for 2025 CapEx, to support sustained growth and innovation.Alphabet Class C Financial Statement Overview
Summary
Alphabet Class C boasts strong financial performance across income statement, balance sheet, and cash flow metrics. High gross and net margins, robust revenue growth, low debt leverage, and strong cash generation indicate a well-managed and profitable company.Income Statement
Alphabet Class C demonstrates strong financial performance with impressive growth metrics. The TTM gross profit margin is 58.6%, while the net profit margin stands at 30.9%, indicating high profitability. Revenue growth has been stable, with a notable 17.1% increase from 2023 to 2024. The EBIT margin is a robust 32.7%, and the EBITDA margin is 37.3%, reflecting efficient operations and cost management.95
Very Positive
Balance Sheet
The company's balance sheet is solid, with a low debt-to-equity ratio of 0.07, showcasing prudent financial leverage. Return on equity (ROE) is strong at 32.1%, indicating effective use of equity capital. The equity ratio is 72.6%, underscoring financial stability and limited reliance on external debt.90
Very Positive
Cash Flow
Alphabet maintains robust cash flow performance with a healthy operating cash flow to net income ratio of 1.2. The free cash flow growth rate is 2.9%, demonstrating consistent cash generation capabilities. The free cash flow to net income ratio is 0.67, highlighting efficient cash conversion from net income.92
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 359.71B | 350.02B | 307.39B | 282.84B | 257.64B | 182.53B | Gross Profit |
| 210.76B | 203.71B | 174.06B | 156.63B | 146.70B | 97.80B | EBIT |
| 117.52B | 112.39B | 84.29B | 74.84B | 78.71B | 41.22B | EBITDA |
| 149.88B | 135.39B | 97.97B | 91.33B | 103.52B | 61.91B | Net Income Common Stockholders |
| 111.00B | 100.12B | 73.80B | 59.97B | 76.03B | 40.27B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 95.33B | 95.66B | 110.92B | 113.76B | 139.65B | 136.69B | Total Assets |
| 475.37B | 450.26B | 402.39B | 365.26B | 359.27B | 319.62B | Total Debt |
| 23.56B | 25.46B | 27.12B | 29.68B | 26.21B | 25.08B | Net Debt |
| 300.00M | 2.00B | 3.07B | 7.80B | 5.26B | -1.39B | Total Liabilities |
| 130.11B | 125.17B | 119.01B | 109.12B | 107.63B | 97.07B | Stockholders Equity |
| 345.27B | 325.08B | 283.38B | 256.14B | 251.63B | 222.54B |
| Cash Flow | Free Cash Flow | ||||
| 74.88B | 72.76B | 69.50B | 60.01B | 67.01B | 42.84B | Operating Cash Flow |
| 132.60B | 125.30B | 101.75B | 91.50B | 91.65B | 65.12B | Investing Cash Flow |
| -53.17B | -45.54B | -27.06B | -20.30B | -35.52B | -32.77B | Financing Cash Flow |
| -80.22B | -79.73B | -72.09B | -69.76B | -61.36B | -24.41B |
Alphabet Class C Technical Analysis
Positive
173.98
Price Trends
161.31
Positive
174.21
Negative
172.44
Positive
Market Momentum
2.81
Negative
61.94
Neutral
68.13
Neutral
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 173.98 is above the 20-day moving average (MA) of 164.23, above the 50-day MA of 161.31, and above the 200-day MA of 172.44, indicating a bullish trend. The MACD of 2.81 indicates Negative momentum. The RSI at 61.94 is Neutral, neither overbought nor oversold. The STOCH value of 68.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GOOG.
Alphabet Class C Risk Analysis
Alphabet Class C disclosed 28 risk factors in its most recent earnings report. Alphabet Class C reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alphabet Class C Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $2.05T | 18.79 | 34.79% | 0.47% | 13.02% | 37.73% | |
84 Outperform | $2.05T | 18.91 | 34.79% | 0.47% | 13.02% | 37.73% | |
80 Outperform | $1.58T | 24.46 | 39.83% | 0.32% | 19.37% | 47.56% | |
77 Outperform | $21.31B | 11.44 | 48.41% | ― | 17.81% | 1175.52% | |
77 Outperform | $131.28B | 105.65 | 24.28% | ― | 16.07% | ― | |
68 Neutral | $29.74B | 8.31 | 9.85% | ― | -1.33% | 32.92% | |
61 Neutral | $14.08B | 5.95 | -4.18% | 3.68% | 2.79% | -36.29% |
* Communication Services Sector Average
Performance Comparison
GOOG
Alphabet Class C
173.98
-2.58
-1.46%
BIDU
Baidu
83.92
-14.55
-14.78%
META
Meta Platforms
642.32
169.68
35.90%
GOOGL
Alphabet Class A
172.90
-2.16
-1.23%
SPOT
Spotify
653.40
345.88
112.47%
PINS
Pinterest
31.49
-10.63
-25.24%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.