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 $180.01 and experiencing a daily gain of 6.09%, coupled with a three-month change of 6.31%, Alphabet Inc is poised for significant growth. A detailed analysis, supported by the GF Score, indicates that Alphabet Inc is strategically positioned for substantial future growth.
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 representing the highest potential for outperformance. Alphabet Inc boasts a GF Score of 98, indicating a top-tier potential for market outperformance.
- Financial strength rank: 10/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 7/10
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 and YouTube Music, sales from the Play Store, and hardware products like Pixel smartphones. Google's cloud computing platform, GCP, contributes about 10% to Alphabet's revenue, with investments in technologies such as self-driving cars (Waymo), health (Verily), and internet access (Google Fiber) comprising the remainder.
Financial Strength Breakdown
Alphabet Inc's Financial Strength is evident in its robust balance sheet and strategic capital management. The company's Interest Coverage ratio stands at an impressive 283.05, significantly above the benchmark set by investment guru Benjamin Graham. Additionally, with an Altman Z-Score of 13.6, Alphabet Inc showcases strong defense against financial distress. The company's strategic debt management is reflected in its favorable Debt-to-Revenue ratio of 0.09.
Profitability and Growth Metrics
Alphabet Inc's Profitability Rank is outstanding, with consistent improvements in Operating Margin and Gross Margin over the past five years. The company's commitment to growth is further evidenced by its high Growth Rank, with a 3-Year Revenue Growth Rate of 22.1%, outperforming 75.57% of peers in the Interactive Media industry.
Conclusion
Considering Alphabet Inc's exceptional financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. For investors seeking similar opportunities, 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.
