Alphabet Inc (GOOGL, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its robust financial health and promising market position. With its shares currently priced at $189.83, Alphabet Inc has enjoyed a daily gain of 2.16%, and an impressive three-month growth of 24.56%. A detailed analysis, supported by the GF Score, indicates that Alphabet Inc is poised for significant growth, making it a potentially lucrative investment.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key aspects of valuation. This system has proven to correlate strongly with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance. Alphabet Inc boasts a GF Score of 94, indicating a strong potential for market outperformance.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Understanding Alphabet Inc's Business
Alphabet Inc, with a market cap of $2.35 trillion and annual sales of $318.15 billion, operates primarily through its subsidiary, Google, which accounts for nearly 90% of its revenue, predominantly from online ads. Other revenue streams include Google Play, YouTube, and hardware sales like the Pixel smartphone and Google Home products. Google's cloud computing ventures represent just over 10% of total revenue. Alphabet also invests in ambitious 'moonshot' projects through its other bets segment, focusing on advancements in health, internet access, self-driving cars, and more.
Financial Strength Breakdown
Alphabet Inc's financial strength is evident in its Interest Coverage ratio of 286.8, significantly surpassing the benchmark set by Benjamin Graham. Its Altman Z-Score of 14.65 further underscores its resilience against financial distress, while a Debt-to-Revenue ratio of 0.09 highlights efficient debt management.
Profitability and Growth Metrics
Alphabet Inc's profitability is impressive, with an increasing Operating Margin over the past five years, reaching 27.42% in 2023. Its consistent Gross Margin improvement reflects its efficiency in revenue conversion. The company's growth is also robust, with a 3-Year Revenue Growth Rate of 22.1%, outperforming 75.1% of its industry peers.
Conclusion
Considering Alphabet Inc's strong financial strength, profitability, and growth metrics, the GF Score highlights the company's unparalleled position for potential outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
