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Alphabet Class A (GOOGL)
NASDAQ:GOOGL
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Alphabet Class A
(NASDAQ:GOOGL)74Outperform
Positive Factors
Advertising Revenue
Advertising revenues were ahead of expectations, with Search and YouTube showing strong growth, driven by strength in insurance and retail for Search, and brand and direct response advertising for YouTube.
AI Momentum
AI momentum is strong with the Gemini platform doubling its developer user base in six months.
Negative Factors
Cloud Revenue
Google Cloud revenue growth was below expectations due to capacity constraints, but it suggests potential for revenue growth acceleration later.
Alphabet Class A (GOOGL) vs. S&P 500 (SPY)
Market Cap
$2.09T
Dividend Yield0.35%
Average Volume (3M)32.04M
Price to Earnings (P/E)21.2
Beta (1Y)1.01
Revenue Growth13.89%
EPS Growth38.99%
CountryUS
Employees183,323
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)8.05
Shares Outstanding5,833,000,000
10 Day Avg. Volume35,473,278
30 Day Avg. Volume32,039,653
Financial Highlights & Ratios
PEG Ratio0.54
Price to Book (P/B)N/A
Price to Sales (P/S)5.82
Price to Cash Flow (P/CF)13.00
P/FCF Ratio13.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$215.56Price Target Upside26.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering37
Alphabet Class A Business Overview & Revenue Model
Company DescriptionAlphabet Inc., the parent company of Google, is a multinational conglomerate specializing in various sectors, including technology, digital advertising, and consumer electronics. Headquartered in Mountain View, California, Alphabet's core products and services span from its dominant search engine, Google Search, to advertising services like Google Ads, and hardware products such as the Pixel smartphones. Additional subsidiaries focus on diverse areas from autonomous vehicles (Waymo) to life sciences (Verily), showcasing Alphabet's commitment to innovation and expanding its influence in the technology landscape.
How the Company Makes MoneyAlphabet Inc. primarily generates revenue through digital advertising, which accounts for the majority of its income. Google Ads, AdSense, and YouTube advertising are key components of this revenue stream, leveraging Google's search engine and video platform to connect advertisers with a vast audience. Additionally, Alphabet earns money through its Google Cloud services, which provide businesses with infrastructure and platform services. Other revenue streams include hardware sales, such as Google Pixel phones and Nest smart home devices, and non-advertising revenue from sources like Google Play Store transactions. Strategic partnerships, investments in emerging technologies, and acquisitions further enhance Alphabet's ability to diversify and strengthen its revenue base.
Alphabet Class A Financial Statement Overview
Summary
Alphabet demonstrates strong financial performance with impressive revenue growth, high profitability margins, and efficient cash flow management. The balance sheet reflects low leverage and significant equity, underscoring financial stability. Overall, strong financial metrics highlight a solid foundation for continued growth.Income Statement
Alphabet exhibits strong financial performance with a consistent growth trajectory. The TTM (Trailing-Twelve-Months) Gross Profit Margin stands at 58.24%, reflecting efficient cost management. The Net Profit Margin of 28.62% indicates robust profitability. Revenue Growth Rate is impressive at 13.83% from the previous year, showcasing solid top-line expansion. The EBIT Margin of 32.12% and EBITDA Margin of 37.11% further underscore operational efficiency. Overall, Alphabet's income statement metrics highlight strong growth and profitability.93
Very Positive
Balance Sheet
Alphabet's balance sheet reveals a stable financial position with a Debt-to-Equity Ratio of 0.07, signifying low leverage and strong equity backing. The Return on Equity (ROE) is solid at 30.79%, indicating effective utilization of shareholders' equity to generate profits. The Equity Ratio stands at 72.19%, highlighting a well-capitalized balance sheet with significant equity relative to total assets. These metrics reflect Alphabet's financial stability and prudent capital structure, though the slight reduction in cash reserves could be monitored.89
Very Positive
Cash Flow
Alphabet demonstrates strong cash flow generation capabilities with a Free Cash Flow Growth Rate of 4.70%, indicating healthy cash flow expansion. The Operating Cash Flow to Net Income Ratio is 1.25, reflecting efficient conversion of accounting profits into cash. The Free Cash Flow to Net Income Ratio is 0.73, showcasing substantial free cash flow relative to net income. These metrics illustrate Alphabet's ability to generate and manage cash flows effectively, supporting future growth initiatives.91
Very Positive
| 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 |
| 22.57B | 28.50B | 29.68B | 26.21B | 25.08B | Net Debt |
| -892.00M | 4.46B | 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 A Technical Analysis
Negative
170.92
Price Trends
189.49
Negative
181.08
Negative
175.54
Negative
Market Momentum
-6.03
Positive
35.15
Neutral
16.67
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOGL, the sentiment is Negative. The current price of 170.92 is below the 20-day moving average (MA) of 181.94, below the 50-day MA of 189.49, and below the 200-day MA of 175.54, indicating a bearish trend. The MACD of -6.03 indicates Positive momentum. The RSI at 35.15 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GOOGL.
Alphabet Class A Risk Analysis
Alphabet Class A disclosed 28 risk factors in its most recent earnings report. Alphabet Class A 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 A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.69T | 28.01 | 34.14% | 0.30% | 21.94% | 61.97% | |
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
81 Outperform | $2.89T | 31.30 | 30.64% | 0.80% | 15.04% | 12.38% | |
76 Outperform | $3.54T | 37.51 | 144.03% | 0.53% | 2.61% | -2.14% | |
75 Outperform | $416.03B | 49.05 | 35.21% | ― | 15.28% | 65.72% | |
74 Outperform | $2.09T | 21.17 | 30.80% | 0.35% | 13.89% | 38.99% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% |
* Communication Services Sector Average
Performance Comparison
GOOGL
Alphabet Class A
170.92
38.73
29.30%
AMZN
Amazon
203.80
29.68
17.05%
AAPL
Apple
235.93
66.61
39.34%
META
Meta Platforms
640.00
151.13
30.91%
MSFT
Microsoft
388.61
-10.99
-2.75%
NFLX
Netflix
972.58
374.08
62.50%
Alphabet Class A Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -17.18% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in revenue growth, particularly in cloud and AI advancements, alongside challenges in network advertising and cloud capacity constraints. The outlook for 2025 includes potential revenue headwinds due to currency fluctuations and leap year effects.Highlights
Record Annual Revenue
Alphabet's revenue for 2024 reached $350 billion, up 14% on a reported basis and 15% in constant currency versus 2023.
Google Cloud Growth
Google Cloud revenue increased by 30% to $12 billion in the fourth quarter, reflecting growth in GCP across core GCP products, AI infrastructure, and generative AI solutions.
AI and Infrastructure Advancements
Introduction of Gemini 2.0, significant progress in AI models, and development of new cloud regions and data centers.
YouTube and Google Services Performance
Google Services revenues were $84 billion for the quarter, up 10%, with YouTube advertising revenues increasing 14% to $10.5 billion.
Strong Cash Flow
Free cash flow of $24.8 billion in the fourth quarter and $72.8 billion for the full year 2024.
Lowlights
Network Advertising Revenue Decline
Network advertising revenue of $8 billion was down 4% year-over-year.
Challenges in Cloud Capacity
Exited 2024 with more demand than available cloud capacity, indicating a tight supply-demand situation.
Impact of Currency and Leap Year on Revenue
Expecting a revenue headwind in Q1 2025 from foreign exchange rates and having one less day due to leap year.
Financial Services Revenue Lapping
2025 expected to be impacted by lapping the strength experienced in the financial service vertical throughout 2024.
Company Guidance
During the Alphabet earnings call for the fourth quarter of fiscal year 2024, significant guidance and metrics were discussed across various segments. Sundar Pichai highlighted the company's robust growth, driven primarily by advancements in AI, with AI overviews now available in over 100 countries and contributing to increased user satisfaction in Search. Alphabet achieved a combined annual revenue run rate of $110 billion for Cloud and YouTube, exceeding their initial target of $100 billion. Google Cloud revenues grew by 30% year-over-year, reaching $12 billion in Q4, while YouTube advertising revenue increased by 14% to $10.5 billion. The company also experienced a notable uptick in its AI-powered platforms, with Vertex AI seeing a 5x increase in customers and a 20x increase in usage over the year. Overall, Alphabet's total revenue for 2024 grew by 14%, reaching $350 billion, with a significant contribution from Google Services, which posted $84 billion in Q4 alone. The company plans to invest approximately $75 billion in capital expenditures in 2025 to support continued growth, particularly in technical infrastructure and AI initiatives.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.