Alphabet Inc., through its subsidiaries, provides online advertising services in the United States and internationally. The last earnings update was 53 days ago. More info.
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$28,535.22||$33,511.11||$42,332.90||$49,209.15||$56,321.18|
|Source||Analyst x15||Analyst x14||Analyst x7||Analyst x4||Analyst x4|
Discounted (@ 11.93%)
Present value of next 5 years cash flows:
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $56,321 × (1 + 2.47%) ÷ (11.93% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
$492,865 = $145,824 + $347,041
Value = Total value / Shares Outstanding ($492,865 / 695)Discount to Share Price
Value per share (USD): $709.62
Current discount (share price of $1,075.31): -51.53%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 11.93% = 2.47% + (1.257 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($751,351,946,222).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
1.257 = 1.248 (1 + (1- 2.7%) (0.71%))
Levered Beta used in calculation = 1.257
Dr. Lawrence Edward Page, also known as Larry, is Co-Founder of Alphabet Inc. and has been its Chief Executive Officer since October 2, 2015. Dr. Page co-founded Google Inc. in 1998 and served as its Chief Executive Officer from April 4, 2011 to October 2, 2015. He served as Chief Executive Officer of Google Inc. from September 1998 to July 2001 and served as its Chief Financial Officer from September 1998 to July 2002. He served as President of Products at Alphabet Inc. from July 2001 to April 2011 and also served as its Assistant Secretary. He worked at Chips & Technologies, Inc. He served as President of the University's Eta Kappa Nu Honor Society and built a programmable plotter and inkjet printer out of Legoš. He has been a Director of Google Inc., since its inception in September 1998 and Alphabet Inc., since October 2, 2015. Dr. Page serves as a Trustee of XPRIZE Foundation, Inc. He is a Member of the National Advisory Committee (NAC) for the University of Michigan College of Engineering. He is a speaker at such forums as the Technology, Entertainment and Design Conference, The Wall Street Journal Technology Summit, the World Economic Forum and the Commonwealth Club. He served at National Academy of Engineering since 2004. He was named a World Economic Forum Global Leader for Tomorrow in 2002 as well as a “Young Innovator Who Will Create the Future“ by MIT's Technology Review magazine. He was recognized as Research and Development Magazine's Innovator of the Year. He was honored with the Marconi Prize in 2004. Dr. Page was granted an honorary MBA by Instituto De Empresa and was the first recipient of the University of Michigan Alumni Society Recent Engineering Graduate Award. He holds a Masters degree in Computer Science from Stanford University and a Bachelor of Science degree in Computer Engineering from the University of Michigan.
Average tenure and age of the Alphabet management team in years:
Average tenure and age of the Alphabet board of directors in years:
Alphabet Inc (NASDAQ:GOOGL) closed yesterday at $1084.87, which left some investors asking whether the high earnings potential can still be justified at this price. … This tells us that Alphabet is overvalued compared to the US market average ratio of 18.28x , and overvalued based on current earnings compared to the internet industry average of 30.6x. … A PE ratio of 45.23x and expected year-on-year earnings growth of 15.38% give Alphabet a quite high PEG ratio of 2.94x.Simply Wall St - – Full article
When Alphabet Inc (NASDAQ:GOOGL) released its most recent earnings update (31 March 2018), I wanted to understand how these figures stacked up against its past performance. … The two benchmarks I used were Alphabet's average earnings over the past couple of years, and its industry performance. … View our latest analysis for Alphabet Commentary On GOOGL's Past Performance I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data.Simply Wall St - – Full article
Margin Calculation for GOOGL Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 16.64 Billion ÷ 117.25 Billion = 14.19% There has been a contraction in Alphabet's margin over the past five years, due to average revenue growth of 16.64% outstripping a 10.50% average growth in net income, indicating that that a smaller percentage of revenue is being converted in to net income despite the top line growth. … Based on future expectations, GOOGL's profit margin will lose its previous trend and become quite steady, with an expectation of 14.84% in annual revenue growth and 15.30% earnings growth expected annually. … Thus, it is essential to run your own analysis on Alphabet's future earnings whilst keeping a watchful eye over their ability to maintain cost efficiency and top line growth as these are the factors driving future earnings growth according to our preliminary margin analysis.Simply Wall St - – Full article
View our latest analysis for Alphabet Breaking down ROE — the mother of all ratios Return on Equity (ROE) is a measure of Alphabet’s profit relative to its shareholders’ equity. … ROE can be dissected into three distinct ratios: net profit margin, asset turnover, and financial leverage. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity NasdaqGS:GOOGL Last Perf Apr 23rd 18 Essentially, profit margin shows how much money the company makes after paying for all its expenses.Simply Wall St - – Full article
In this article I am going to calculate the intrinsic value of Alphabet Inc (NASDAQ:GOOGL) by taking the foreast future cash flows of the company and discounting them back to today's value. … 5-year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF ($, Millions) $31,066.20 $36,563.51 $41,869.33 $50,130.67 $58,254.12 Source Analyst x17 Analyst x13 Analyst x7 Analyst x4 Analyst x4 Present Value Discounted @ 11.94% $27,751.75 $29,177.78 $29,847.13 $31,923.64 $33,138.87 Present Value of 5-year Cash Flow (PVCF)= $151,839 We now need to calculate the Terminal Value, which accounts for all the future cash flows after the five years. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = $58,254 × (1 + 2.5%) ÷ (11.9% – 2.5%) = $630,124 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = $630,124 / ( 1 + 11.9%)5 = $358,457 The total value, or equity value, is then the sum of the present value of the cash flows, which in this case is $510,296.Simply Wall St - – Full article
The company's shares saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $1187.56 and falling to the lows of $1005.18. … GOOGL’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. … If you believe GOOGL should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable.Simply Wall St - – Full article
I will touched on some key aspects you should know on a high level, around its financials and growth prospects going forward. … GOOGL has high near term liquidity, with short term assets (cash and other liquid assets) amply covering upcoming one-year liabilities, as well as long-term commitments. … GOOGL has managed its cash well at a current level of US$101.87B.Simply Wall St - – Full article
Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for GOOGL Price per share = $1100.07 Earnings per share = $18.274 ∴ Price-Earnings Ratio = $1100.07 ÷ $18.274 = 60.2x The P/E ratio itself doesn’t tell you a lot; however, it becomes very insightful when you compare it with other similar companies. … For example, if you are inadvertently comparing riskier firms with GOOGL, then GOOGL’s P/E would naturally be higher than its peers since investors would reward its lower risk with a higher price. … If this assumption does not hold true, GOOGL’s higher P/E ratio may be because firms in our peer group are being undervalued by the market.Simply Wall St - – Full article
Currently with earnings of US$12.66B, we can expect this to reach US$29.07B by 2019. … To understand the overall trajectory of GOOGL's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope. … NasdaqGS:GOOGL Future Profit Mar 12th 18 This results in an annual growth rate of 22.99% based on the most recent earnings level of US$12.66B to the final forecast of US$40.73B by 2021.Simply Wall St - – Full article
At this current level of debt, GOOGL's cash and short-term investments stands at US$101.87B for investing into the business. … On top of this, GOOGL has produced US$37.09B in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 934.52%, signalling that GOOGL’s debt is appropriately covered by operating cash. … Next Steps: GOOGL’s high cash coverage and low debt levels indicate its ability to utilise its borrowings efficiently in order to generate ample cash flow.Simply Wall St - – Full article
Alphabet Inc., through its subsidiaries, provides online advertising services in the United States and internationally. The company offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal Internet products, such as Ads, Android, Chrome, Commerce, Google Cloud, Google Maps, Google Play, Hardware, Search, and YouTube, as well as technical infrastructure and newer efforts, including Virtual Reality. This segment also offers digital content, enterprise cloud services, and hardware products, as well as other miscellaneous products and services. The Other Bets segment includes businesses, such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X, as well as fiber Internet and Television services. Alphabet Inc. was founded in 1998 and is headquartered in Mountain View, California.
1600 Amphitheatre Parkway,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|NasdaqGS||GOOGL||Class A Common Stock||Nasdaq Global Select||US||USD||19. Aug 2004|
|DB||ABEA||Class A Common Stock||Deutsche Boerse AG||DE||EUR||19. Aug 2004|
|XTRA||ABEA||Class A Common Stock||XETRA Trading Platform||DE||EUR||19. Aug 2004|
|LSE||0RIH||Class A Common Stock||London Stock Exchange||GB||USD||19. Aug 2004|
|SWX||GOOGL||Class A Common Stock||SIX Swiss Exchange||CH||CHF||19. Aug 2004|
|WBAG||GOOA||Class A Common Stock||Wiener Boerse AG||AT||EUR||19. Aug 2004|
|SNSE||GOOGL||Class A Common Stock||Santiago Stock Exchange||CL||USD||19. Aug 2004|
|BVC||GOOGL||Class A Common Stock||Bolsa de Valores de Colombia||CO||COP||19. Aug 2004|
|BMV||GOOGL *||Class A Common Stock||Bolsa Mexicana de Valores||MX||MXN||19. Aug 2004|
|NasdaqGS||GOOG||Class C Capital Stock||Nasdaq Global Select||US||USD||27. Mar 2014|
|BASE||GOOGL||CEDEAR EACH REPR 1/29 COM STK CL 'A'||Buenos Aires Stock Exchange||AR||ARS||15. Jan 2014|
|DB||ABEC||Class C Capital Stock||Deutsche Boerse AG||DE||EUR||27. Mar 2014|
|XTRA||ABEC||Class C Capital Stock||XETRA Trading Platform||DE||EUR||27. Mar 2014|
|LSE||0HD6||Class C Capital Stock||London Stock Exchange||GB||USD||27. Mar 2014|
|BOVESPA||GOGL35||25 BDRS REPR 1 NPV C||Bolsa de Valores de Sao Paulo||BR||BRL||09. May 2016|
|BOVESPA||GOGL34||25 BDRS REPR 1 NPV A||Bolsa de Valores de Sao Paulo||BR||BRL||09. May 2016|
|BIT||GOOG||Class C Capital Stock||Borsa Italiana||IT||EUR||27. Mar 2014|
|WBAG||GOOC||Class C Capital Stock||Wiener Boerse AG||AT||EUR||27. Mar 2014|
|SNSE||GOOG||Class C Capital Stock||Santiago Stock Exchange||CL||USD||27. Mar 2014|
|BMV||GOOG *||Class C Capital Stock||Bolsa Mexicana de Valores||MX||MXN||27. Mar 2014|
|Internet Software and Services|
|Area||Date (UTC time)|
|Company Analysis updated:||2018/05/23 03:37|
|End of day share price update:||2018/05/22 00:00|
|Last estimates confirmation:||2018/05/17|
|Last earnings update:||2018/03/31|
|Last annual earnings update:||2017/12/31|
All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.