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Alphabet Class C (GOOG)
NASDAQ:GOOG
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Alphabet Class C
(NASDAQ:GOOG)76Outperform
Positive Factors
Advertising Revenue
Google Advertising maintained solid growth with Google Search and YouTube ad revenues showing significant year-over-year increases.
Earnings
Alphabet's net income increased by 28% year-over-year to $26.5 billion, due to enhanced operating efficiency and savings from global office space optimization.
Negative Factors
Cloud Revenue
Cloud revenue growth decelerated due to supply constraints despite strong demand for AI computing.
Alphabet Class C (GOOG) vs. S&P 500 (SPY)
Market Cap
$2.09T
Dividend Yield0.35%
Average Volume (3M)19.91M
Price to Earnings (P/E)21.5
Beta (1Y)1.01
Revenue Growth13.89%
EPS Growth38.99%
CountryUS
Employees183,323
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)8.05
Shares Outstanding5,497,000,000
10 Day Avg. Volume22,445,169
30 Day Avg. Volume19,914,049
Financial Highlights & Ratios
PEG Ratio0.55
Price to Book (P/B)N/A
Price to Sales (P/S)6.01
Price to Cash Flow (P/CF)13.50
P/FCF Ratio13.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$220.00Price Target Upside25.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Alphabet Class C Business Overview & Revenue Model
Company DescriptionAlphabet Inc., through its Class C shares (GOOG), operates as a global technology leader, primarily known for its search engine, Google. The company is headquartered in Mountain View, California, and functions through various segments including Google Services, Google Cloud, and Other Bets. Google Services encompasses core products such as Search, YouTube, Google Maps, Google Play, and the Android operating system. Google Cloud provides infrastructure and data analytics services, while Other Bets focuses on emerging businesses like Waymo, Verily, and more. Alphabet's mission is to organize the world's information and make it universally accessible and useful.
How the Company Makes MoneyAlphabet Inc. generates revenue primarily through advertising services, which constitute the majority of its total earnings. Advertising revenue comes from Google Search, YouTube ads, and partner sites in the Google Network through AdSense and AdMob. The company leverages its vast data analytics capabilities to provide targeted advertising, enhancing ad performance and user engagement. Additionally, Alphabet earns revenue from its Google Cloud segment by offering cloud computing services, including storage, data management, and machine learning capabilities. Other revenue streams include hardware sales, such as Pixel phones and Nest products, as well as digital content and apps sold on the Google Play Store. Strategic partnerships and investments in various sectors also contribute to Alphabet's financial success.
Alphabet Class C Financial Statement Overview
Summary
Alphabet demonstrates exceptional financial health characterized by strong revenue and profit growth, efficient leverage management, and robust cash flow generation. The company's financial stability and profitability make it well-positioned to capitalize on future opportunities and withstand potential market fluctuations.Income Statement
Alphabet exhibits strong financial performance with substantial revenue growth of 13.82% in TTM (Trailing-Twelve-Months) over the previous year. The gross profit margin stands at 58.23%, and net profit margin is impressive at 28.62%. EBIT and EBITDA margins are also robust at 32.13% and 37.11% respectively, indicating high operational efficiency and profitability.92
Very Positive
Balance Sheet
The balance sheet is healthy with a low debt-to-equity ratio of 0.07, suggesting minimal leverage risk. Return on equity is strong at 30.79%, reflecting efficient use of equity capital. The equity ratio is 72.20%, showing a solid equity base and financial stability.88
Very Positive
Cash Flow
Cash flow analysis reveals a positive trajectory with a 4.70% growth in free cash flow. The operating cash flow to net income ratio is 1.25, indicating strong cash generation relative to earnings. Free cash flow to net income ratio is 0.73, suggesting effective cash utilization.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 350.02B | 307.39B | 282.84B | 257.64B | 182.53B | Gross Profit |
| 203.71B | 174.06B | 156.63B | 146.70B | 97.80B | EBIT |
| 112.39B | 84.29B | 74.84B | 78.71B | 41.22B | EBITDA |
| 112.39B | 97.97B | 91.33B | 103.52B | 61.91B | Net Income Common Stockholders |
| 100.12B | 73.80B | 59.97B | 76.03B | 40.27B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 95.66B | 110.92B | 113.76B | 139.65B | 136.69B | Total Assets |
| 450.26B | 402.39B | 365.26B | 359.27B | 319.62B | Total Debt |
| 22.57B | 28.50B | 29.68B | 26.21B | 25.08B | Net Debt |
| -892.00M | 4.46B | 7.80B | 5.26B | -1.39B | Total Liabilities |
| 125.17B | 119.01B | 109.12B | 107.63B | 97.07B | Stockholders Equity |
| 325.08B | 283.38B | 256.14B | 251.63B | 222.54B |
| Cash Flow | Free Cash Flow | |||
| 72.76B | 69.50B | 60.01B | 67.01B | 42.84B | Operating Cash Flow |
| 125.30B | 101.75B | 91.50B | 91.65B | 65.12B | Investing Cash Flow |
| -45.54B | -27.06B | -20.30B | -35.52B | -32.77B | Financing Cash Flow |
| -79.73B | -72.09B | -69.76B | -61.36B | -24.41B |
Alphabet Class C Technical Analysis
Negative
174.99
Price Trends
190.80
Negative
182.76
Negative
177.09
Negative
Market Momentum
-5.75
Positive
38.91
Neutral
22.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOG, the sentiment is Negative. The current price of 174.99 is below the 20-day moving average (MA) of 182.12, below the 50-day MA of 190.80, and below the 200-day MA of 177.09, indicating a bearish trend. The MACD of -5.75 indicates Positive momentum. The RSI at 38.91 is Neutral, neither overbought nor oversold. The STOCH value of 22.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GOOG.
Alphabet Class C Risk Analysis
Alphabet Class C disclosed 28 risk factors in its most recent earnings report. Alphabet Class C reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alphabet Class C Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.62T | 26.83 | 37.14% | 0.31% | 21.94% | 61.97% | |
82 Outperform | $2.16T | 37.73 | 24.29% | ― | 10.99% | 91.61% | |
81 Outperform | $2.89T | 31.30 | 34.29% | 0.81% | 15.04% | 12.38% | |
76 Outperform | $2.09T | 21.46 | 32.91% | 0.35% | 13.89% | 38.99% | |
76 Outperform | $3.54T | 37.51 | 136.52% | 0.53% | 2.61% | -2.14% | |
75 Outperform | $416.03B | 49.97 | 38.43% | ― | 15.28% | 65.72% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% |
* Communication Services Sector Average
Performance Comparison
GOOG
Alphabet Class C
174.99
42.91
32.49%
AMZN
Amazon
208.36
34.85
20.09%
AAPL
Apple
235.74
67.42
40.05%
META
Meta Platforms
656.47
161.74
32.69%
MSFT
Microsoft
401.02
1.98
0.50%
NFLX
Netflix
990.92
393.23
65.79%
Alphabet Class C Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -15.75% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Alphabet's strong financial performance with significant growth in revenue driven by AI and Cloud. The company achieved notable progress in AI innovations and infrastructure efficiency. However, challenges such as declining network revenues, capacity constraints in Cloud, and anticipated headwinds in 2025 due to financial services lapping and foreign exchange rates were noted.Highlights
Strong Revenue Growth
Alphabet's revenue for 2024 reached $350 billion, up 14% on a reported basis and 15% in constant currency versus 2023. Consolidated revenue for Q4 was $96.5 billion, a 12% increase.
AI and Cloud Milestones
Exited the year with AI and Cloud annual revenue run rate at $110 billion, surpassing the goal of $100 billion. Google Cloud revenue increased by 30% to $12 billion in Q4.
YouTube and Search Success
YouTube advertising revenue increased by 14% to $10.5 billion. Search and YouTube advertising showed strong growth, with Search revenue rising by 13%.
Infrastructure Efficiency
Google data centers deliver nearly 4x more computing power per unit of electricity compared to five years ago. This efficiency is attracting more cloud customers.
Innovations in AI
Introduction of Gemini 2.0, which advances in multi-modality and tool use. AI overviews are driving higher satisfaction and increased Search usage.
Lowlights
Network Revenue Decline
Network advertising revenue decreased by 4% year-over-year in Q4, impacted by previous strength in APAC-based retailers.
Financial Services Lapping
2025 will face challenges due to lapping the strong performance seen in the financial services vertical in 2024, particularly insurance.
Capacity Constraints in Cloud
Strong demand for AI products led to a situation where demand exceeded available capacity in Q4 2024, indicating potential lost revenue opportunities.
Foreign Exchange and Leap Year Headwinds
Anticipated revenue headwinds in Q1 2025 due to unfavorable foreign exchange rates and the absence of an additional day from the previous leap year.
Company Guidance
During the Alphabet fourth quarter and fiscal year 2024 earnings call, Sundar Pichai highlighted the company's strong performance, driven by advancements in AI and its full-stack capabilities. The Google Cloud and YouTube segments achieved a combined annual revenue run rate of $110 billion, exceeding initial expectations. The significant progress in AI infrastructure was marked by the development of 11 new cloud regions and data centers, along with the introduction of Gemini 2.0, a leading AI model. In terms of product innovation, AI overviews in Search and the Circle to Search feature contributed to increased user satisfaction and search usage. YouTube maintained its leading position in streaming watch time in the U.S., while Google Cloud saw a 30% revenue increase, highlighting strong demand for AI-powered solutions. The company's financial performance included a 12% increase in consolidated revenue, reaching $96.5 billion for Q4, and a 31% rise in operating income to $31 billion. Looking ahead, Alphabet plans to invest approximately $75 billion in capital expenditures for 2025, focusing on technical infrastructure and expanding AI capabilities.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.