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Alphabet Inc. (GOOGL) Stock Guide

September 17, 2020
Bull Case
  • Cash/Debt ratio is higher than the industry and sector averages
Bear Case
  • Stock price high relative to the 52-week range
  • Revenue growth lower than the industry and sector averages
  • Company’s profitability is declining

Before we start: if you're looking for GOOGL stock price, you can quickly find it out by visiting Finny and typing "GOOGL quote". If you're looking for a quick scoop on GOOGL stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "GOOGL". You'll get all this info in one place. Or you can just type "GOOGL news" to get the latest stock news.

Looking to buy or sell Alphabet Inc. (GOOGL)? Interested in getting the full scoop on GOOGL, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this GOOGL stock guide, we'll address key questions about GOOGL, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are GOOGL earnings?
2. GOOGL buy or sell? What is GOOGL Finny Score?
3. What are the reasons to buy GOOGL? Why should I buy GOOGL stock?
4. What are the reasons to sell GOOGL? Why should I sell GOOGL stock?
5. What are GOOGL key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are GOOGL earnings?

GOOGL trailing 12-month earnings per share (EPS) is $45.49.


2. GOOGL buy or sell? What is GOOGL Finny Score?

Our quantitative analysis shows 1 reason to buy and 3 reasons to sell GOOGL, resulting in Finny Score of 25.

3. What are the reasons to buy GOOGL? Why should I buy GOOGL stock?

Here are the reasons to buy GOOGL stock:

  • As the number of online users and usage increases, so will digital ad spending, of which Google will remain one of the main beneficiaries.
  • Android’s dominant global market share of smartphones leaves Alphabet’s Google well positioned to continue generating top-line growth as search traffic shifts from desktop to mobile.
  • The significant cash generated from the Google search business allows Alphabet to remain focused on innovation and the long-term growth opportunities that new areas present.
  • Alphabet is showing increased appetite in the Home Assistant space. The company made its foray into this market in October 2016 with the launch of Google Home. Google Home performs an array of tasks such as playing music, reading books, managing calendars, answering queries, searching places, calling over cabs, controlling smart home devices and so on.
  • Alphabet focuses on innovation, launching products and services for multiple industries. The development and enhancements of its search technology over time has created win-win situations wherein buyers, sellers and the public at large were benefited. The success of this strategy led to very strong growth since inception.
  • Google has been growing rapidly in this fast-growing highly-competitive cloud market. The company has signed many partnerships and has been opening data centers to extend its cloud footprint worldwide.
  • The company’s history of execution is unparalleled. Alphabet has made significant investments to diversify its revenues, but still managed strong double-digit growth, which is indicative of good management execution. The strength in the core search business was supported by the successful integration of major acquisitions (AdMob, DoubleClick, YouTube, ITA and Nest to name a few), which provided it with the technology for sustained growth in the highly dynamic and competitive markets in which it operates.
  • Although the desktop was the most popular computing device in the past, mobile search is now equally if not more popular. That is because there is a growing tendency among users to look for information at the exact time the need arises. The plethora of mobile Internet devices that are making their way to the market is making it easier on the device front.
  • Alphabet has a number of mobile initiatives. First, it is leveraging its Android OS not just to build search market share but also to drive sales of apps and digital products through Google Play. The company continues to bring improvements with each version of the OS, at the same time spurring app development.
  • Online and mobile video consumption is soaring and Alphabet remains strongly positioned here with the YouTube platform. In its race to target TV ad dollars, Alphabet allowed third-party (Nielsen and comScore) tagging of YouTube videos to determine the effectiveness of ads on YouTube versus ads shown on TV. The Google Preferred program pulls out the top 5% of the most engaging content on YouTube for advertisers.
  • Alphabet has increased focus on the online payments segment. The first phones incorporating Near Field Communication (“NFC”) technology were introduced quite some time back, but adoption was slow because it required retailers to invest in new terminals and because ISIS (the payments service created by wireless carriers) stood in the way. But Alphabet has since struck a deal with carriers, bought out most of the ISIS technology, and even acquired distribution rights for last-mile access in some cases.
  • Alphabet is clearly getting more serious about ecommerce opportunities in an attempt to diversify away from the increasingly competitive search market. For search advertising to be effective, Alphabet needs to track certain user activity, which it does through cookies (programs installed on user devices) or when users agree to share location with the Maps app.
  • Another area of diversification that is likely to gain traction over the next few years is Android Auto. This is a technology that projects the user’s Android phone (Lollipop version or later) onto a car’s dashboard enabling the use of Alphabet technology like Google Now and access to Maps, directions, music and other apps on the phone just by placing the phone in the allotted space. The phone also charges automatically.
  • GOOGL cash to debt ratio is 7.50, higher than the average industry (0.17) and sector (0.17) cash to debt ratio. See GOOGL cash to debt chart.

4. What are the reasons to sell GOOGL? Why should I sell GOOGL stock?

Let's look at the reasons to sell GOOGL stock (i.e., the bear case):

  • There is little revenue diversification within Alphabet, as it remains heavily dependent on Google and the state of the search ad space.
  • Alphabet is allocating too much capital toward high-risk bets, which face a very low probability of generating returns.
  • Google’s dominant position in online search is not sustainable, as more companies and regulatory agencies are contesting the methods through which the company has been extending its leadership.
  • Alphabet faces significant litigation all over the world as a result of its dominant position in search. Regulatory scrutiny continues to worsen with the competition commission issuing several statements of objections (which precedes judicial proceedings unless settled).
  • There are also some other margin pressures: foreign currency impact, fast-paced international growth, and a growing volume of lower-priced YouTube clicks.
  • Google's Android Pay, an NFC-enabled payment system for transaction processing at a large number of retailers, faces significant competition at the moment from Apple Pay and rival payment systems: PayPal, Amazon, Samsung, Square, etc.
  • Alphabet has made numerous attempts to build a position in the social segment. This is because social networking through websites, such as Facebook and Twitter are places where people are sharing a lot of personal information and preferences that may be used to develop more customized results and thereby enable better targeting of advertisements. The fact that people are spending more time on social networks means that they are spending less time on the browser.
  • The company is likely to see an increased amount of competition from Facebook for digital advertising dollars. The social network has already taken the lead in display ads and has now doubled down on video.
  • GOOGL stock price ($1638.49) is at the 52-week high. Perhaps now is a good time to sell? See GOOGL price chart.
  • GOOGL quarterly revenue growth was -1.70%, lower than the industry and sector average revenue growth (1.28% and 0.89%, respectively). See GOOGL revenue growth chart.
  • GOOGL profitability is declining. The YoY profit margin change was -10.15 percentage points. See GOOGL profitability chart.

Key Stats

5. What are GOOGL key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for GOOGL:

Metrics GOOGL
Price $1,632.54
Average Price Target / Upside $1,779.70 / 9.01%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Internet Content & Information
Sector Technology
Number of Employees 98,771
Market Cap $1,064.93B
Forward P/E Ratio 27.58
Price/Book Ratio 6.41
Revenue (TTM) $166.03B
YoY Quarterly Revenue Growth -1.70%
Profit Margin 18.99%

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