GOOG Key Financial Metrics & Ratios

Summary

Business

Earnings Call

Valuation

Profitability

Financial Health

10Y annualized return is excellent at 19.8% per year

GOOG has met or exceeded earnings expectations in the majority of recent quarters (8/10)

Attractive P/E Ratio

Strong Price-to-Sales Ratio

Strong Return on Equity

Healthy Profit Margins

Low Debt Levels

Strong Interest Coverage

🏆 Strong Market Position

🚀 AI Innovation Leadership

📈 Robust Financial Performance

🔮 Growth in Cloud Services

📊 Expanding AI Applications

High P/FCF Ratio

Elevated EV/EBITDA

Moderate Dividend Yield

Low Cash Ratio

⚠️ Dependence on Advertising Revenue

⏳ Capacity Constraints

💵 Currency Headwinds

Overall, Alphabet demonstrates strong business quality driven by its leading market position in search and advertising, robust financial performance, and innovative AI advancements. However, its reliance on advertising revenue and current capacity constraints in cloud services pose potential risks. Future prospects remain promising, particularly in the expansion of cloud services and AI applications, despite anticipated headwinds from currency fluctuations.

Analysis Date: February 4, 2025
Last Updated: March 12, 2025

+509%

+19.8% per year

Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.

Country US

Exchange NASDAQ

Industry Internet Content & Information

Sector Communication Services

Market Cap $2.41T

CEO Mr. Sundar Pichai

Alphabet Inc. is the parent company of Google, and it offers a wide range of products and services that people use every day. This includes Google Search, YouTube for videos, Gmail for email, and Google Maps for directions. They also provide cloud services, which help businesses store and manage their data online. Additionally, Alphabet is involved in new and innovative projects like healthcare services and other internet technologies.

Streams of revenue

Google Search & Other: 56%

Google Cloud: 13%

Google Subscriptions, Platforms, And Devices: 12%

YouTube Ads: 10%

Google Network: 9%

Other Bets: 0%

Geographic Distribution

UNITED STATES: 49%

EMEA: 29%

Asia Pacific: 16%

Americas Excluding United States: 6%

Core Products

✉️

Gmail Email service

📹

YouTube Video sharing platform

📈

Google Ads Online advertising platform

🗺️

Google Maps Navigation and maps

🎮

Google Play App and content store

☁️

Google Cloud Cloud computing services

🖥️

Google Workspace Collaboration tools

Business Type

Mixed Business Model

Competitive Advantages

📊

Data Dominance The vast amount of data collected from users enhances its advertising effectiveness and product development.

🌐

Network Effects The growing user base of platforms like YouTube and Google Search enhances value for advertisers, creating a self-reinforcing cycle of growth.

🌟

Brand Recognition Alphabet's strong global brand recognition drives user trust and loyalty across its products and services.

🔗

Ecosystem Integration Alphabet's interconnected services create a seamless user experience, encouraging customer retention and cross-platform usage.

🚀

Technological Innovation Continuous investment in cutting-edge technologies, such as AI and cloud computing, keeps Alphabet at the forefront of industry advancements.

Key Business Risks

🔒

Data Privacy With increasing concerns about data privacy, Alphabet could face legal challenges and reputational damage due to potential breaches or misuse of user data.

📈

Market Competition Intense competition from other tech giants and emerging companies in the internet content and cloud service sectors could erode market share and profitability.

🌍

Economic Fluctuations Global economic downturns can affect advertising budgets and overall demand for services, impacting revenue generation.

⚖️

Regulatory Compliance Alphabet faces risks related to changing regulations and antitrust scrutiny in various regions, which could impact its business operations and financial performance.

💻

Technological Disruption Rapid technological advancements could render existing products and services obsolete, requiring continuous innovation and investment.

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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.

Graham Value Metrics

Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.

Intrinsic Value

Estimated fair value based on Graham's formula

$315.22

Current Market Price: $146.11

IV/P Ratio: 2.16x (>1.0 indicates undervalued)

Margin of Safety

Gap between intrinsic value and market price

54.0%

Graham recommended a minimum of 20-30% margin of safety

Higher values indicate a greater potential discount to fair value

Graham Criteria Checklist

Benjamin Graham's value investing checklist for GOOG

Positive earnings (5+ years)

Dividend history (5+ years)

P/E ratio ≤ 20 (18.04)

P/B ratio ≤ 1.5 (5.56)

Current ratio ≥ 2.0 (1.84x)

Long-term debt < Net current assets (0.30x)

Margin of safety (54.0%)

GOOG does not meet all Graham criteria

Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.

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About Profitability Metrics

Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.

Return on Equity (ROE)

Measures how efficiently a company uses its equity to generate profits

34.55%

10% 15%

Higher values indicate better returns for shareholders

TTM (as of 2025-04-30)

Gross Profit Margin

Percentage of revenue retained after accounting for cost of goods sold

58.27%

20% 40%

Higher values indicate better efficiency in production

TTM (as of 2025-04-30)

Net Profit Margin

Percentage of revenue retained after accounting for all expenses

28.62%

8% 15%

Higher values indicate better overall profitability

TTM (as of 2025-04-30)

Strong Return on Equity

32.48%

Return on Equity

A return on equity of 32.48% indicates the company is effectively generating profits from shareholders' equity.

Healthy Profit Margins

28.62%

Net Profit Margin

GOOG boasts a net profit margin of 28.62%, showcasing strong profitability in its operations.

Moderate Dividend Yield

0.35%

Dividend Yield

The dividend yield of 0.35% is relatively low, which may not attract income-focused investors.

About Financial Health Metrics

Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.

Debt to Equity Ratio

Total debt divided by total equity

0.08x

1.0x 2.0x

Lower values indicate less financial leverage and risk

Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk

Q4 2024

Current Ratio

Current assets divided by current liabilities

1.84x

1.0x 2.0x

Higher values indicate better short-term liquidity

Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good

Q4 2024

Low Debt Levels

0.08

Debt-to-Equity Ratio

A debt-to-equity ratio of 0.08 shows that GOOG maintains low leverage, indicating financial stability.

Strong Interest Coverage

522.74

Interest Coverage Ratio

An interest coverage ratio of 522.74 indicates the company can comfortably meet its interest obligations.

Low Cash Ratio

0.26

Cash Ratio

With a cash ratio of 0.26, the company may face challenges in covering short-term liabilities with liquid assets.

Meeting Expectations

8 /10

Higher values indicate better execution and credibility

🏆 Strong Market Position

13% YoY increase

Search Revenue Growth

14% YoY increase

YouTube Advertising Revenue Growth

Alphabet maintains a leading position in the search engine market, with significant revenue growth driven by advancements in AI technology. The Search and YouTube segments reported substantial increases in ad revenues, showcasing the effectiveness of their advertising model.

🚀 AI Innovation Leadership

4.4 million developers using Gemini models

Gemini Model Usage

Available in over 100 countries

AI Overview Adoption

The company has made significant progress in AI, with the launch of Gemini 2.0 models and AI overviews in Search, enhancing user engagement and satisfaction. They are rapidly integrating AI across their products and platforms.

📈 Robust Financial Performance

$350 billion

Total Revenue

28% increase

Net Income Growth

Alphabet reported strong financial performance with $350 billion in revenue for 2024, marking a 14% increase. The operating income and net income also saw substantial growth, indicating a solid business model.

⚠️ Dependence on Advertising Revenue

Approx. 70%

Percentage of Revenue from Advertising

Despite strong growth, Alphabet's revenues are heavily reliant on advertising, which could pose risks in economic downturns or shifts in consumer behavior.

🔮 Growth in Cloud Services

$12 billion in Q4

Google Cloud Revenue

30% YoY increase

Cloud Growth Rate

The Google Cloud segment saw a 30% increase in revenue, reflecting strong demand for AI-powered cloud solutions. The company is investing heavily in infrastructure to support this growth.

📊 Expanding AI Applications

$75 billion planned for 2025

AI Infrastructure Investments

Alphabet is well-positioned to leverage AI in various domains, including consumer products, cloud services, and advertising. The potential for new applications and services is vast, driven by ongoing innovation in AI technologies.

⏳ Capacity Constraints

Dependent on CapEx execution

Forecasted Capacity Increase

The company has indicated that it is experiencing capacity constraints in its Cloud segment, which could limit growth potential until additional infrastructure is deployed.

💵 Currency Headwinds

Negative impact expected in Q1 2025

Estimated Revenue Impact

The strengthening U.S. dollar may negatively impact revenue growth in international markets, which could affect overall financial performance in the coming quarters.