Why Alphabet Inc (GOOGL) Stock Is A Buy?

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As part of our ongoing series here at The Acquirer’s Multiple, each week we focus on one of the stocks from our Stock Screeners, and why it’s a ‘buy’ based on key fundamentals.

One of the cheapest stocks in our Stock Screeners is:

Alphabet Inc (GOOGL)

Alphabet is a holding company. Internet media giant Google is a wholly owned subsidiary. Google services account for nearly 90% of Alphabet’s revenue, of which more than 85% is from online ads. Other Google services revenue is from sales of apps and content on Google Play and YouTube, as well as sales of hardware such as Chromebooks, the Pixel smartphone, and smart home products, which include Nest and Google Home. Google’s cloud computing offerings account for a bit more than 10% of total Alphabet revenue. Alphabet’s moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), provide faster internet access (Google Fiber), enable self-driving cars (Waymo), and more.

A quick look at the share price history (below) over the past twelve months shows that the price is up 45.92%. Here’s why the company is undervalued.


GOOGL data by YCharts

Key Stats

Market Cap: $1.900 Trillion

Enterprise Value: $1.819 Trillion

Operating Earnings

Operating Earnings: $86.144 Billion

Acquirer’s Multiple

Acquirer’s Multiple: 21.20

Free Cash Flow (TTM)

Free Cash Flow: $69.50 Billion

FCF/EV Yield %:

FCF/EV Yield: 3.66

Shareholder Yield %:

Shareholder Yield: 3.20

Other Indicators

Piotroski F Score: 9.00

Altman Z-Score (TTM): 11.25

ROA (5 Year Avge%): 21

More By This Author:

Microsoft Corp. DCF Valuation: Is The Stock Undervalued?
Tesla Inc. DCF Valuation: Is The Stock Undervalued?
Large-Cap Stocks In Trouble: Here Are The 10 Worst Performers Over The Past 12 Months

Disclosure: None.

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