GOOG  Google Inc.

Exchange

NASDAQ

Sector

Technology

Industry

Computer Software: Programming, Data Processing

Market Cap.

657.51B

Vuru Grade

74.99/100

Current Price

$950.51
-29.835 (-3.043%)

Growth Price

$641.02
Overvalued by 32.56%

Stability Price

$154.24
Overvalued by 83.77%

Company Metrics

  • P/E 32.119
  • P/S 7.156
  • P/B 4.681
  • EPS 29.593
  • Cash ROIC 33.18%
  • Cash Ratio 5.15
  • Dividend 0 / 0%
  • Avg. Vol. 1.69M
  • Shares 691.75M
  • Market Cap. 657.51B

Company Description

Google Inc. maintains an index of Web sites and other online content for users, advertisers, and Google network members and other content providers. It offers AdWords, an auction-based advertising program; AdSense program, which enables Web sites that are part of the Google Network to deliver ads from its AdWords advertisers; Google Display, a display advertising network that comprises the videos,... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Alphabet, Inc. Earnings: 5 Metrics You Shouldn't Overlook
Motley Fool - 7 hours ago
Shares of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) are down several percent today following the tech company's second-quarter earnings report.
Alphabet Falls After Earnings: Buying Opportunity - Seeking Alpha
Alphabet Inc (GOOGL) Stock Is a Value After Post-Earnings Slip - Yahoo News
Alphabet Q2: Price Target Lowered To $1050
Seeking Alpha - 9 hours ago
Alphabet Inc. (GOOGL/GOOG) has just reported its Q2 2017 earnings. Though it beat analyst estimations on both revenue and EPS (adjusted for the EU fine), the stock dropped 3% in the after market.
Can Earnings Push Alphabet Inc (GOOGL) Stock Back Over $1000?
Investorplace.com - Jul 24, 2017
There's a good chance that Alphabet Inc (NASDAQ:GOOGL) second-quarter earnings report, due out Monday evening, will push shares back toward the four-digit mark, if history is any indication.
Alphabet Earnings Preview: Google Parent Reports Q2 Results Today - Seeking Alpha
Alphabet Inc 2Q 2017 Earnings Preview: EU Fine Will Eat Into Profits - ValueWalk
3 Stocks to Watch on Tuesday: Alphabet Inc (GOOGL), Biogen Inc (BIIB) and ...
Investorplace.com - 12 hours ago
Despite a 0.4% move higher from tech stocks, helped by Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN), U.S.
Alphabet earnings: A $2.74 billion hit for Google, potential YouTube results ...
MarketWatch - Jul 21, 2017
As it gears up for a second-quarter earnings report scheduled for Monday, Alphabet Inc. is already accounting for a $2.74 billion hit and may be preparing to reveal some long-awaited numbers.
Alphabet Inc (GOOGL) Q2 Earnings: Is Disappointment in Store? - Investorplace.com
JPMorgan adjusts Alphabet Q2 guidance - Seeking Alpha
Alphabet Inc. Q2 Income Advances 28%
Markets Insider - Jul 24, 2017
(RTTNews) - Alphabet Inc. (GOOGL) released a profit for its second quarter that increased compared to the same period last year.
Why Alphabet is getting ready to unleash millions of mosquitoes in California
Silicon Valley Business Journal - Jul 17, 2017
Verily, Alphabet Inc.'s life sciences spinoff, is getting ready to release millions of mosquitoes in California - but read below before you stock up on bug repellent.
Alphabet Inc (GOOGL) Fighting Zika Virus With Modified Mosquitos - StockNews.com (blog)
3 Big Stock Charts for Tuesday: Alphabet Inc (GOOG), Domino's Pizza, Inc. (DPZ ...
Investorplace.com - 8 hours ago
Today's three big stock charts look at the charts of Domino's Pizza, Inc. (NYSE:DPZ), 3M Co (NYSE:MMM) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) as each of these companies are seeing selling in the wake of their earnings reports. Is this a ...
Sadoff Investment Management Llc Buys Alphabet Inc, Manulife Financial Corp ...
Nasdaq - Jul 24, 2017
Sadoff Investment Management Llc initiated holdings in Alphabet Inc. The purchase prices were between $839.88 and $1004.28, with an estimated average price of $934.2.
Alphabet Inc: shares slip, brokerages slash PT
Times of India - 12 hours ago
However, Alphabet reported second-quarter revenue and profit above analysts estimates, mainly driven by higher advertising revenue from its Google unit.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for GOOG to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate GOOG's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$950.51 Current Price

$641.02 Growth Price (DCF)

Overvalued by 32.56%


Growth Rate Assumed by Market: 27.68%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$154.24 Stability Price (EPV)

Overvalued by 83.77%


Discount Rate: 15.0%

$111.24 NCA Price

Overvalued by 88.30%

$1,089.13 Book Price

Undervalued by 14.58%


Excellent Cash Return on Invested Capital over the past 5 years

GOOG has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

GOOG has created $33.18 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 13.35B 11.30B 11.42B 16.11B 25.82B
divided by
Invested Capital 31.37B 36.30B 49.93B 55.09B 64.41B
Cash ROIC 42.54% 31.14% 22.86% 29.24% 40.09%

Satisfactory Return on Equity over the past 5 years

GOOG has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

GOOG has generated $13.99 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 10.79B 12.21B 13.93B 16.35B 19.48B
divided by
Stockholders' Equity 71.72B 87.31B 104.50B 120.33B 139.04B
Return on Equity 15.04% 13.99% 13.33% 13.59% 14.01%

Excellent Business Performance over the past 10 years

GOOG has been able to maintain profitability in good times and bad. This could mean GOOG has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

GOOG has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 3.37B 5.49B 8.51B 7.06B 11.13B 13.35B 11.30B 11.42B 16.11B 25.82B

Very Strong Balance Sheet

GOOG has more Cash than its Total Liabilities, resulting in $83.66 Net Cash per share. In other words, if you buy GOOG today, the price you're paying for shares is actually $866.84 because $83.66 of Cash is included in the current share price. This much Cash is very healthy. It can help GOOG sustain itself in the face of any economic turmoil and makes a stock buyback more of a possibility.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 14.22B 15.85B 24.48B 34.98B 44.63B 48.09B 58.72B 64.40B 73.07B 86.33B
Current Assets 17.29B 20.18B 29.17B 41.56B 52.76B 60.45B 72.89B 80.69B 90.11B 105.41B
Total Assets 25.34B 31.77B 40.50B 57.85B 72.57B 93.80B 110.92B 131.13B 147.46B 167.50B
Current Liabilities 2.04B 2.30B 2.75B 10.00B 8.91B 14.34B 15.91B 16.81B 19.31B 16.76B
Total Liabilities 2.65B 3.53B 4.49B 11.61B 14.43B 22.08B 23.61B 26.63B 27.13B 28.46B
Stockholder' Equity 22.69B 28.24B 36.00B 46.24B 58.15B 71.72B 87.31B 104.50B 120.33B 139.04B
Current Ratio 8.49 8.77 10.62 4.16 5.92 4.22 4.58 4.80 4.67 6.29
TL-to-TA 0.10 0.11 0.11 0.20 0.20 0.24 0.21 0.20 0.18 0.17

Consistent Reinvestment of Profits over the past 10 years

GOOG has consistently retained profits. This may put GOOG in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, GOOG can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 9.33B 13.56B 20.08B 27.87B 37.61B 48.34B 61.26B 75.71B 89.22B 105.13B
Retained Earnings Growth - 45.28% 48.08% 38.77% 34.94% 28.55% 26.73% 23.58% 17.85% 17.83%

Competitive Advantage over the past 10 years

GOOG likely has a competitive advantage which prevents other companies from entering or competing in their industry. This could be strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at future prospects to determine its sustainability.

$23.34 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 4.20B 4.23B 6.52B 8.51B 9.74B 10.79B 12.21B 13.93B 16.35B 19.48B
divided by
Revenue 16.59B 21.80B 23.65B 29.32B 37.91B 50.18B 59.83B 66.00B 74.99B 90.27B
Net Profit Margin 25.33% 19.39% 27.57% 29.01% 25.69% 21.50% 20.42% 21.10% 21.80% 21.58%

Strong Pricing Power over the past 10 years

GOOG has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$61.29 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 9.94B 13.17B 14.81B 18.90B 24.72B 29.54B 33.97B 40.31B 46.83B 55.13B
divided by
Revenue 16.59B 21.80B 23.65B 29.32B 37.91B 50.18B 59.83B 66.00B 74.99B 90.27B
Gross Margin 59.93% 60.44% 62.61% 64.47% 65.21% 58.88% 56.78% 61.07% 62.44% 61.08%

Medium Capital Intensity over the past 10 years

GOOG has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

49.03% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 2.40B 2.36B 809.89M 4.02B 3.44B 3.27B 7.36B 10.96B 9.92B 10.21B
divided by
Net Income 4.20B 4.23B 6.52B 8.51B 9.74B 10.79B 12.21B 13.93B 16.35B 19.48B
Capital Expenditure Ratio 57.16% 55.80% 12.42% 47.24% 35.31% 30.34% 60.24% 78.68% 60.65% 52.43%

No Dividend History over the past 10 years

GOOG has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 396.30M 393.35M 394.18M 323.25M 327.21M 644.93M 676.96M 687.07M 744.68M 698.71M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 702.53 303.11 622.73 598.86 645.90 700.01 1,109.46 530.39 771.00 771.82
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

GOOG has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 396.30M 393.35M 394.18M 323.25M 327.21M 644.93M 676.96M 687.07M 744.68M 698.71M
Stock Bought Back - 0.75% -0.21% 21.94% -1.21% -49.26% -4.73% -1.47% -7.74% 6.58%
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Discussion
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14
Posted by ValueDave  (on March 18, 2012)
All I gotta do is quote Charlie Munger, “Google has a huge new moat. In fact, I’ve never probably seen such a wide moat. I don’t know how to take it away from them. Their moat is filled with sharks.” GOOG is Growth at a Reasonable Price company.
2
Posted by JManuelCano  (on February 19, 2014)
Google is tackling competitors like Apple and Microsoft not for the sake of profit but to expand its horizons and innovate in established fields as well as establishing new fields. Google has the ability to discover the new 'it' technology and establish itself as a leading innovator like Apple, and as an adaptive and strong brand like Microsoft.
2
Posted by f.boillatmadfouny  (on January 21, 2013)
For me Google is giving what consumers want. Just think of Chrome, and the amazing built-in app and extension system.
1
Posted by superentronics  (on February 22, 2014)
I think GOOGLE may be slightly overheated but I still plan on holding for the long haul. If it does drop then I will pick up more shares.
1
Posted by korakbarzan02gmail.com  (on May 9, 2014)
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1
Posted by longTermTitan  (on May 4, 2014)
Free cash, marketing, innovation, and the largest economic moat i've every seen. I don't need to convince you why this is a good company to invest in. I only regret I hadn't invested sooner.
1
Posted by ANT  (on September 24, 2013)
Hi there, my name is Anthony. I am looking to invest some funds into stock. Can you help me?
1
Posted by pbanik  (on September 24, 2013)
Besides this website, try Zacks.com, SeekingAlpha.com, and Fool.com for ideas. Vuru has people commenting, but sometimes, it can be days or even weeks before someone posts a comment, which is why I suggested alternatives to this website. I could give you some ideas as to some stocks to look into, but do your due diligence, meaning you should do your homework and investigate it further to see if it is worth investing. You should also talk to an investment professional, preferably one with a CFA designation, because CFAs analyzes financial information. Stockbrokers sell stocks, but typically they don't analyze stocks, so their motivation is to sell you stocks, because that's how they generate a commission. Here's the ticker symbols of some stocks I'm looking at, but as I said before, do your homework: BP, BVN, INTC MT, PGF.TO, PGH, T, VOD,
1
Posted by Ingo  (on July 11, 2013)
Is Google a brilliant company? well yes

But what about the price?

P/E of 27 is quite high.

Think i pass and stand on the sideline for a while and hoping for a big short term drop in price.
1
Posted by pbanik  (on July 13, 2013)
@Ingo Yes, plus the P/B and P/S metrics are rather high. It closed Friday at its' historical high. Eventually stocks will cool off. I would be patient and wait for the stock to plunge down. For those of who can't say it won't happen, look at IBM. It's trading for less today than it was in the 1960s.
1
Posted by Scudy  (on May 11, 2012)
Google has already diversified and poured money into so many different businesses that it has already proven itself worthy in spending each dollar towards the long term. As long as that statement holds true, I will never doubt Google. Correction on previous statement, "Search is the largest source of revenue for Google, but its not the only source, (Ex. youtube ads)From my standpoint, Google has no competitors really as there is no firm really competing on Google's level save Sony, Microsoft.
1
Posted by bill  (on September 28, 2012)
Where is it backed up that search is stalling. Free Cash has grown to 11 billion. I'm not a huge fan of the Mot buy, but Youtube is a behemoth. Revenue has tripled to 2 billion in 3 years at Youtube. Goog should concentrate more on new content or aggregating content better in Youtube. Combine that with their new fast fiber and I see Youtube earnings possibly growing to 10 billion in 8-10 years. I hope Goog recognizes that Youtube is potentially their biggest asset.
1
Posted by pbanik  (on October 24, 2012)
@drew Android is winning the battle with iOS in terms of mobile phones.
Android Market Share Q3 2012: Google's Still Beating Apple, But Will The iPhone 5 Change That?
http://www.huffingtonpost.com/2012/09/18/android-market-share-q3-2012_n_1893292.html
Their revenue is up roughly 45% in Quarter 2 of 2012 compared to the same period last year, however their net income is down about 20%. http://www.google.ca/finance?q=NASDAQ%3AGOOG&fstype=ii&ei=STCHUPCiBISqqgHQMA
1
Posted by Scudy  (on January 20, 2013)
It is 2013. I want to hear everyone's thoughts towards this company. Please include your diagnosis on their M&A division, Startup divisions, alternative energy investments, Google Fiber, Google Glass, Google's relationship with auto manufacturers pertaining to its involvement with autonomous driving, Chrome/Android/Search/Maps/Google+.
1
Posted by Robert.T  (on March 18, 2012)
Search market share is stalling. Not sure that they can keep growing till the end of time.
3
Posted by patel.neel53  (on March 23, 2012)
Well Google itself said that it is no more only a search company. But much more than that. Their entry in Mobile industry and TV/Internet industry is a sign of it. As they cannot only rely only on search anymore.
2
Posted by theguy  (on March 23, 2012)
The problem is, Google+ totally changed the company. A lot of the employees have been complaining that it's an entirely different culture since the G+ push and since Larry Page took over. I'm far less bullish on GOOG than I used to be as a result...
1
Posted by drew  (on October 17, 2012)
Google is merging into becoming a platform and an OS. We may think that OSX has the advantage here, but actually, Google has been App based well before Chrome, people just looked at it as though they were visiting websites, but what Google was doing was building an integrated platform which is now being tied together in actual hardware through Nexus. While Apple arrived there through a single-minded leader, Google really crowd sourced itself to the same destination, with the difference being that Google's platform is far more nimble and responsive, while Apple is now struggling with a gated community issue.
1
Posted by Joe.R  (on August 2, 2012)
GOOG is now a long slow growth company-- advertising while not dead isn't paying out like it used to. I do believe the future of GOOGs income/growth will be social/mobile and internet and you'll prob see an uptick in the price as earnings from GOOGs new high-speed internet service takes hold. Remember they bought a lot of dark fiber from data companies going belly up following the dot com bubble. JMO.
0
Posted by thecoloradopeach  (on March 23, 2014)
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0
Posted by thecoloradopeach  (on March 23, 2014)
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Posted by thecoloradopeach  (on March 23, 2014)
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-12
Posted by dennisyap  (on March 28, 2012)
Have to watch out Window 8 it might overtake Android in mobile platform.