Alphabet Inc. (NASDAQ: GOOGL)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001652044
Market Cap 4,640.35 Bn
P/B 25.29
P/E 165.77
P/S 32.68
ROIC (Qtr) 24.09
Div Yield % 0.06
Rev 1y % (Qtr) 15.95
Total Debt (Qtr) 33.71 Bn
Debt/Equity (Qtr) 0.09

About

Alphabet Inc., commonly known as Google, is a multinational technology conglomerate that specializes in Internet-related services and products. The company, headquartered in Mountain View, California, was established in 1998 by Larry Page and Sergey Brin with a mission to organize the world's information and make it universally accessible and useful. Alphabet Inc. operates in a variety of industries, including search, online advertising, cloud computing, and hardware production. Its ticker symbol is GOOGL. Alphabet Inc.'s main business activities...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 151.42B provides robust 4.49x coverage of total debt 33.71B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 503.20B provides 14.93x coverage of total debt 33.71B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 151.42B provides exceptional 308.40x coverage of interest expenses 491M, showing strong debt service capability.
  • Strong operating cash flow of 151.42B provides 3.13x coverage of SG&A expenses 48.39B, showing efficient operational cost management.
  • Tangible assets of 503.20B provide exceptional 32.21x coverage of deferred revenue 15.62B, showing strong service capability backing.

Bear case

  • Operating cash flow of 151.42B barely covers its investment activities of (84.69B), with a coverage ratio of -1.79, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 151.42B provides thin coverage of dividend payments of (9.96B) with a -15.21 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (84.69B) provide weak support for R&D spending of 55.63B, which is -1.52x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 23.09B provide limited coverage of acquisition spending of (1.52B), which is -15.23x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Short-term investments of 75.41B significantly exceed cash reserves of 23.09B, which is 3.27x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.

Geographical Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 4,640.35 Bn 165.77 32.68 33.71 Bn
2 META Meta Platforms, Inc. 1,686.65 Bn 27.90 8.39 83.90 Bn
3 SPOT Spotify Technology S.A. 90.36 Bn 54.66 4.55 2.57 Bn
4 BIDU Baidu, Inc. 53.33 Bn 42.19 2.91 13.66 Bn
5 TME Tencent Music Entertainment Group 24.29 Bn 15.53 5.45 0.54 Bn
6 RDDT Reddit, Inc. 23.38 Bn 66.97 12.28 0.03 Bn
7 NBIS Nebius Group N.V. 23.18 Bn 106.27 68.17 4.51 Bn
8 PINS Pinterest, Inc. 13.48 Bn 6.78 3.32 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 8.63 1.01
EV to Cash from Ops. EV/CFO 95.75 -2.25
EV to Debt EV to Debt 137.27 25.07
EV to EBIT EV/EBIT 141.80 -22.95
EV to EBITDA EV/EBITDA 127.97 11.41
EV to Free Cash Flow [EV/FCF] EV/FCF 179.22 27.73
EV to Market Cap EV to Market Cap 1.00 1.17
EV to Revenue EV/Rev 32.59 129.45
Price to Book Value [P/B] P/B 25.29 1.09
Price to Earnings [P/E] P/E 165.77 4.69
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 12.48 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 8.00 -9.05
Dividend per Basic Share Div per Share (Qtr) 0.82 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 13.48 2.62
Interest Coverage Int. cover (Qtr) 310.47 -207.53
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -58.03 -24.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 15.69 178.93
Dividend Growth (1y) % Div 1y % (Qtr) 105.00 0.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 31.90 32.08
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 19.94 -478.54
EBIT Growth (1y) % EBIT 1y % (Qtr) 35.78 32.57
EBT Growth (1y) % EBT 1y % (Qtr) 35.69 -26.72
EPS Growth (1y) % EPS 1y % (Qtr) 34.43 -16.98
FCF Growth (1y) % FCF 1y % (Qtr) 31.76 17.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.03 20.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.72 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.04 0.02
Cash Ratio Cash Ratio (Qtr) 0.23 1.52
Current Ratio Curr Ratio (Qtr) 1.75 3.38
Debt to Equity Ratio Debt/Equity (Qtr) 0.09 -0.39
Interest Cover Ratio Int Coverage (Qtr) 310.47 -207.53
Times Interest Earned Times Interest Earned (Qtr) 310.47 -207.53
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 44.60 -4,345.07
EBIT Margin % EBIT Margin % (Qtr) 39.55 -4,854.87
EBT Margin % EBT Margin % (Qtr) 39.42 -5,073.45
Gross Margin % Gross Margin % (Qtr) 59.20 58.35
Net Profit Margin % Net Margin % (Qtr) 32.20 -5,074.39