Alphabet Inc (GOOGL, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance. With its shares currently priced at $159.83 and experiencing a daily gain of 1.12%, despite a three-month change of -9.8%, the company shows promising signs of substantial growth. A detailed analysis, supported by the GF Score, positions Alphabet Inc for significant future success.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have shown a strong correlation 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 indicating the highest potential for outperformance. Alphabet Inc boasts a GF Score of 99, signaling exceptional potential.
- Financial strength rank: 10/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 7/10
- Momentum rank: 10/10
Understanding Alphabet Inc's Business
Alphabet Inc, a holding company that wholly owns the internet giant Google, is based in California and derives slightly less than 90% of its revenue from Google services, primarily from advertising sales. Other revenue streams include subscription services like YouTube TV, sales from the Play Store, and hardware products like Pixel smartphones. Google's cloud computing platform, GCP, contributes about 10% to the revenue, with investments in technologies such as self-driving cars (Waymo) and health (Verily) rounding out the portfolio.
Financial Strength Breakdown
Alphabet Inc's Financial Strength is evident in its robust balance sheet and an impressive Interest Coverage ratio of 283.05, indicating a strong ability to cover interest obligations. The company's Altman Z-Score of 12.87 suggests a strong buffer against financial distress, and a Debt-to-Revenue ratio of 0.09 highlights effective debt management.
Profitability Rank Breakdown
Alphabet Inc's Profitability Rank is impressive, with an increasing Operating Margin over the past five years, reaching 27.42% in 2023. The company's Gross Margin also reflects a consistent rise, indicating growing efficiency in converting revenue into profit. The Piotroski F-Score and a Predictability Rank of 5.0 stars further affirm Alphabet Inc's solid financial health.
Growth Rank Breakdown
Alphabet Inc is ranked highly for Growth, with a 3-Year Revenue Growth Rate of 22.1%, outperforming 75.47% of peers in the Interactive Media industry. The company's EBITDA growth rates over three and five years underscore its capability to sustain growth.
Conclusion
Considering Alphabet Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's unparalleled position for potential outperformance. For investors looking for similar opportunities, the GF Score Screen offers a valuable resource for identifying high-potential stocks.
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.
