As part of our ongoing series here at The Acquirer’s Multiple, each week we focus on one of the stocks from our Stock Screeners, and why it’s a ‘buy’ based on key fundamentals.
One of the cheapest stocks in our Stock Screeners is:
Alphabet Inc (GOOGL)
Alphabet is a holding company. Internet media giant Google is a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart home products, which include Nest and Google Home, also contribute to other revenue. Alphabet’s moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), provide faster internet access (Google Fiber), enable self-driving cars (Waymo), and more.
Overall, the company has seen significant growth in revenue, gross profit, operating income, and net income from continuing operation net minority interest from 2021 to 2023. This growth is likely due to a number of factors, including the company’s expansion into new markets, the launch of new products, and the improvement of its operational efficiency.
A quick look at the share price history (below) over the past twelve months shows that the price is up 24.22%. Here’s why the company is undervalued.
Key Stats
Market Cap: $1.716 Trillion
Enterprise Value: $1.627 Trillion
Operating Earnings
Operating Earnings: $75.15 Billion
Acquirer’s Multiple
Acquirer’s Multiple: 21.70
Free Cash Flow (TTM)
Free Cash Flow: $71.09 Billion
FCF/EV Yield %:
FCF/EV Yield: 26.54
Shareholder Yield %:
Shareholder Yield: 4.14
Other Indicators
Piotroski F Score (TTM): 8.00
Altman Z-Score (TTM): 10.24
ROA (5 Year Avge%): 20
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