I did a quick analysis of Alphabet (GOOG) stock this morning.
The stock now trades at around 12 x earnings.
It’s also around 4 x revenue and 23 x free cash flow.
That’s pretty good considering the company has grown earnings 26% per year over the last five years.
Personally I think Google is looking pretty good value here. Certainly when compared to other stocks on the market.
Full disclosure: I am long GOOG myself and these are my personal opinions not financial advice. #investing #stockmarket #overlookedalpha
The stock now trades at around 12 x earnings.
It’s also around 4 x revenue and 23 x free cash flow.
That’s pretty good considering the company has grown earnings 26% per year over the last five years.
Personally I think Google is looking pretty good value here. Certainly when compared to other stocks on the market.
Full disclosure: I am long GOOG myself and these are my personal opinions not financial advice. #investing #stockmarket #overlookedalpha
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NewsTranscript
00:00 Should you buy Google stock?
00:01 On a valuation basis, Google is cheap.
00:04 Earnings over the last 12 months is about $97 billion.
00:07 Google's enterprise value is 1.2 trillion.
00:10 So we're down to about 12 times earnings
00:13 or four times revenue, 23 times free cashflow.
00:16 That's pretty good seeing the company's great earnings
00:19 26% per year over the last five years.
00:21 If we're moving into a recession,
00:23 that's gonna mean a decrease on Google ad prices.
00:26 That's gonna put pressure on the earnings
00:28 and expand this PE ratio.
00:30 Also, Google's other businesses like Google Cloud,
00:33 Waymo and Verily are still loss-making.
00:35 So let's say Google grows earnings at around 15% per year
00:39 and trades at 18 times EBITDA.
00:41 That's gonna give you a return of around 20% per year.
00:44 So let's say the company grows earnings around 10% per year.
00:47 That will give you a return of around 14.7% per year.
00:51 That's pretty good.
00:52 I think Google is looking pretty good here.
00:53 It's obviously a quality company.
00:54 It's not outrageously cheap,
00:56 but it's a better value than many of the other stocks out there right now.