Alphabet Class C (GOOG) AI Stock Analysis

• Market Cap: $2.14T
• Dividend Yield: 0.47%
• Average Volume (3M): 28.57M
• Price to Earnings (P/E): 19.7
• Beta (1Y): 1.04
• Revenue Growth: 13.02%
• EPS Growth: 37.73%
• Country: US
• Employees: 185,719
• Sector: Communication Services
• Sector Strength: 90
• Industry: Internet Content & Information
• EPS (TTM): 2.81
• Shares Outstanding: 5,459,000,000
• 10 Day Avg. Volume: 35,350,005
• 30 Day Avg. Volume: 28,569,473
• PEG Ratio: -1.00
• Price to Book (P/B): 4.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.31
• Enterprise Value/Market Cap: 0.43
• Enterprise Value/Revenue: 0.67
• Enterprise Value/Gross Profit: 4.38
• Enterprise Value/Ebitda: 1.76
• 1Y Price Target: $199.18
• Price Target Upside: 10.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 81 Outperform
• Price Target: $198.00 ▲(10.15%Upside)

Alphabet's strong financial performance and positive earnings call sentiment are the most significant factors, showcasing robust growth and profitability. Technical indicators and valuation suggest some caution, with moderate metrics indicating a balanced outlook.

Positive Factors

AI Integration

Google's AI Overviews have reached 1.5 billion users per month, driving higher satisfaction and usage, which is a positive indicator for future growth.

Financial Performance

Alphabet's operating income increased by 20% year over year, primarily due to effective control in selling and marketing expenses.

Share Repurchase

The company initiated a $70 billion share repurchase program, indicating confidence in its valuation and future performance.

Negative Factors

Ad Business Challenges

Management noted several headwinds for ad businesses, including a decline in ad budget from certain APAC-based retailers.

Earnings Growth

Despite earnings beat, management expects the increase in capital expenditures will continue to drag earnings growth, as depreciation growth will accelerate.

Search Competition

Apple is considering adding AI providers as search options on Safari, which suggests increased competition for Google in the search market.

Alphabet Class C Business Overview & Revenue Model

Company Description

Alphabet 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 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 Class C demonstrates strong financial performance with high profitability and efficient operations. The income statement highlights impressive margins with a gross profit margin of 58.6% and net profit margin of 30.9%. Revenue growth is notable at 17.1% year-over-year. The balance sheet shows low leverage with a debt-to-equity ratio of 0.07, and strong return on equity at 32.1%. Cash flow metrics indicate robust cash generation and conversion efficiency.

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.

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.

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.

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
EBITDA	149.88B	135.39B	97.97B	85.16B	103.52B	61.91B
Net Income	111.00B	100.12B	73.80B	59.97B	76.03B	40.27B
Balance Sheet
Total Assets	475.37B	450.26B	402.39B	365.26B	359.27B	319.62B
Cash, Cash Equivalents and Short-Term Investments	95.33B	95.66B	110.92B	113.76B	139.65B	136.69B
Total Debt	23.56B	25.46B	27.12B	29.68B	26.21B	25.08B
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

• Technical Analysis Sentiment: Positive
• Last Price: 179.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 179.76 is above the 20-day moving average (MA) of 174.58, above the 50-day MA of 168.54, and above the 200-day MA of 173.82, indicating a bullish trend. The MACD of 2.09 indicates Negative momentum. The RSI at 60.96 is Neutral, neither overbought nor oversold. The STOCH value of 80.49 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
GOOGL	83 Outperform	$2.14T	19.61	34.79%	0.48%	13.02%	37.73%
META	82 Outperform	$1.81T	28.05	39.83%	0.29%	19.37%	47.56%
GOOG	81 Outperform	$2.14T	19.73	34.79%	0.47%	13.02%	37.73%
PINS	80 Outperform	$24.14B	12.98	48.41%	―	17.81%	1175.52%
SPOT	76 Outperform	$145.04B	114.64	24.28%	―	16.07%	―
BIDU	71 Outperform	$29.82B	8.57	9.85%	―	-1.33%	32.92%
Sector *	55 Neutral	HK$64.86B	-1.42	-1.91%	7.25%	-4.22%	-14.17%