Alphabet

Sinisa

Sinisa

— 3 min read
Alphabet

Based on the provided search results, here's an analysis of Alphabet (Google) stock as of September 2024:

Recent Performance

Alphabet stock (GOOGL) has experienced some volatility and pullback recently:

  • The stock is trading around $155.90 per share as of September 13, 2024.
  • It has pulled back by 5.77% over the past month.
  • GOOGL hit a recent peak of $191.18 on July 2024 but is now trading below its 3-month low point.
  • For 2024 overall, Google stock has only gained 6.5% as of September 11.

Financial Results

Alphabet reported strong Q2 2024 financial results in July:

  • Revenue of $84.74 billion, up 13.59% year-over-year.
  • Earnings per share of $1.89, beating analyst estimates of $1.85.
  • Search segment remains the largest revenue contributor at $48.5 billion (57% of total revenue).
  • Cloud segment reached over $10 billion in quarterly revenue for the first time.

Analyst Outlook

Despite recent pullbacks, many analysts remain optimistic about GOOGL's potential:

  • The average analyst price target is $202.66, suggesting over 29% upside from current levels.
  • Morgan Stanley lowered their price target to $190 from $205 but maintained an overweight rating.
  • Analysts expect 2024 earnings of $7.63 per share, up 31.6% year-over-year.

Key Factors to Watch

Several factors could impact GOOGL's performance going forward:

  • The Department of Justice antitrust trial against Google's ad tech business starts on September 9, 2024.
  • Potential regulatory actions, including discussions of breaking up parts of Google's business.
  • Ongoing AI developments and integration across Google's products and services.
  • Competition in the search market as AI capabilities advance.

Valuation

  • GOOGL is trading at around 21 times forward earnings.
  • Some analysts view the stock as undervalued given its strong cash flow generation and growth potential.

While facing some near-term headwinds, Alphabet maintains a dominant position in search and is investing heavily in AI. Investors should closely monitor regulatory developments and the company's ability to monetize AI advancements in evaluating GOOGL stock.

Based on the provided search results and current information as of September 13, 2024, here's an analysis of Alphabet (GOOGL) stock valuation:

Current Stock Price and Performance

  • Alphabet stock is trading around $155.90 per share as of September 13, 2024[1].
  • The stock has pulled back by 5.77% over the past month.
  • For 2024 overall, Google stock has gained 17.09% as of September 11.

Valuation Metrics

  • Price-to-Earnings (PE) Ratio: 22.37 as of September 12, 2024.
  • Forward PE Ratio: 19.48.
  • Price-to-Sales (PS) Ratio: 5.97.
  • Price-to-Book (PB) Ratio: 6.45.
  • EV/EBITDA: 16.21.

Market Capitalization and Enterprise Value

  • Market Cap: $1.93 trillion.
  • Enterprise Value: $1.87 trillion.

Analyst Projections

  • Average analyst price target: $199.94, suggesting 27.84% upside potential.
  • Analyst consensus rating: "Buy".
  • Projected revenue growth (5-year): 11.16%.
  • Projected EPS growth (5-year): 19.95%.

Free Cash Flow Analysis

  • Last 12 months FCF: $60.787 billion.
  • FCF margin: 18.5%.
  • Projected 2025 FCF: $71.5 billion (based on analyst revenue estimates and historical FCF margins).

Valuation Estimates

  • Conservative valuation estimate: $193 per share (29.4% upside) based on a 3.0% FCF yield.
  • Some analysts see potential for over 55% upside based on a 2.5% FCF yield, though this is considered more aggressive.

Key Factors to Consider

  • Strong financial performance: Q2 2024 revenue of $84.74 billion, up 13.59% year-over-year.
  • Ongoing antitrust concerns: Second U.S. government antitrust trial opened recently.
  • AI developments: Alphabet's investments in AI could drive future growth.
  • Regulatory risks: Potential for significant fines or business model changes due to regulatory actions.

While Alphabet stock has experienced some recent pullback, many analysts view it as undervalued given its strong cash flow generation, dominant market position, and growth potential in areas like AI and cloud computing. However, investors should carefully consider regulatory risks and competitive pressures in evaluating the stock.

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