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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 9/10

vs
industry
vs
history
Cash to Debt 14.45
GOOGL's Cash to Debt is ranked higher than
50% of the 361 Companies
in the Global Internet Content & Information industry.

( Industry Median: 14.39 vs. GOOGL: 14.45 )
Ranked among companies with meaningful Cash to Debt only.
GOOGL' s Cash to Debt Range Over the Past 10 Years
Min: 6.95  Med: 1121.08 Max: 763014.7
Current: 14.45
6.95
763014.7
Equity to Asset 0.83
GOOGL's Equity to Asset is ranked higher than
86% of the 348 Companies
in the Global Internet Content & Information industry.

( Industry Median: 0.62 vs. GOOGL: 0.83 )
Ranked among companies with meaningful Equity to Asset only.
GOOGL' s Equity to Asset Range Over the Past 10 Years
Min: 0.75  Med: 0.84 Max: 0.93
Current: 0.83
0.75
0.93
Interest Coverage 187.55
GOOGL's Interest Coverage is ranked higher than
58% of the 233 Companies
in the Global Internet Content & Information industry.

( Industry Median: 91.58 vs. GOOGL: 187.55 )
Ranked among companies with meaningful Interest Coverage only.
GOOGL' s Interest Coverage Range Over the Past 10 Years
Min: 151.9  Med: 1139.33 Max: 9999.99
Current: 187.55
151.9
9999.99
F-Score: 7
Z-Score: 13.55
M-Score: -2.55
WACC vs ROIC
8.41%
34.24%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating margin (%) 25.97
GOOGL's Operating margin (%) is ranked higher than
84% of the 352 Companies
in the Global Internet Content & Information industry.

( Industry Median: 4.79 vs. GOOGL: 25.97 )
Ranked among companies with meaningful Operating margin (%) only.
GOOGL' s Operating margin (%) Range Over the Past 10 Years
Min: 23.34  Med: 30.54 Max: 35.4
Current: 25.97
23.34
35.4
Net-margin (%) 21.85
GOOGL's Net-margin (%) is ranked higher than
84% of the 352 Companies
in the Global Internet Content & Information industry.

( Industry Median: 3.22 vs. GOOGL: 21.85 )
Ranked among companies with meaningful Net-margin (%) only.
GOOGL' s Net-margin (%) Range Over the Past 10 Years
Min: 19.39  Med: 23.61 Max: 29.02
Current: 21.85
19.39
29.02
ROE (%) 14.23
GOOGL's ROE (%) is ranked higher than
66% of the 331 Companies
in the Global Internet Content & Information industry.

( Industry Median: 6.38 vs. GOOGL: 14.23 )
Ranked among companies with meaningful ROE (%) only.
GOOGL' s ROE (%) Range Over the Past 10 Years
Min: 14.12  Med: 17.63 Max: 23.26
Current: 14.23
14.12
23.26
ROA (%) 11.94
GOOGL's ROA (%) is ranked higher than
77% of the 363 Companies
in the Global Internet Content & Information industry.

( Industry Median: 2.97 vs. GOOGL: 11.94 )
Ranked among companies with meaningful ROA (%) only.
GOOGL' s ROA (%) Range Over the Past 10 Years
Min: 11.82  Med: 14.87 Max: 21.41
Current: 11.94
11.82
21.41
ROC (Joel Greenblatt) (%) 70.01
GOOGL's ROC (Joel Greenblatt) (%) is ranked higher than
62% of the 356 Companies
in the Global Internet Content & Information industry.

( Industry Median: 39.26 vs. GOOGL: 70.01 )
Ranked among companies with meaningful ROC (Joel Greenblatt) (%) only.
GOOGL' s ROC (Joel Greenblatt) (%) Range Over the Past 10 Years
Min: 73.35  Med: 119.13 Max: 174.46
Current: 70.01
73.35
174.46
Revenue Growth (3Y)(%) 12.80
GOOGL's Revenue Growth (3Y)(%) is ranked higher than
59% of the 239 Companies
in the Global Internet Content & Information industry.

( Industry Median: 6.90 vs. GOOGL: 12.80 )
Ranked among companies with meaningful Revenue Growth (3Y)(%) only.
GOOGL' s Revenue Growth (3Y)(%) Range Over the Past 10 Years
Min: 12.8  Med: 29.30 Max: 193.3
Current: 12.8
12.8
193.3
EBITDA Growth (3Y)(%) 13.10
GOOGL's EBITDA Growth (3Y)(%) is ranked higher than
60% of the 183 Companies
in the Global Internet Content & Information industry.

( Industry Median: 4.80 vs. GOOGL: 13.10 )
Ranked among companies with meaningful EBITDA Growth (3Y)(%) only.
GOOGL' s EBITDA Growth (3Y)(%) Range Over the Past 10 Years
Min: 13.1  Med: 26.15 Max: 268.1
Current: 13.1
13.1
268.1
EPS Growth (3Y)(%) 9.50
GOOGL's EPS Growth (3Y)(%) is ranked higher than
55% of the 160 Companies
in the Global Internet Content & Information industry.

( Industry Median: 6.70 vs. GOOGL: 9.50 )
Ranked among companies with meaningful EPS Growth (3Y)(%) only.
GOOGL' s EPS Growth (3Y)(%) Range Over the Past 10 Years
Min: 9.5  Med: 28.95 Max: 232
Current: 9.5
9.5
232
» GOOGL's 10-Y Financials

Financials (Next Earnings Date: Est. 2016-07-16)


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q2 2015

GOOGL Guru Trades in Q2 2015

Leon Cooperman 213,659 sh (New)
Steven Cohen 303,800 sh (+313.33%)
Jim Simons 54,700 sh (+128.87%)
Ray Dalio 21,190 sh (+79.73%)
Andreas Halvorsen 2,736,152 sh (+67.00%)
Ron Baron 21,040 sh (+63.93%)
Larry Robbins 532,568 sh (+61.35%)
Manning & Napier Advisors, Inc 627,569 sh (+44.91%)
John Burbank 4,515 sh (+31.75%)
David Rolfe 432,845 sh (+27.83%)
Louis Moore Bacon 34,000 sh (+18.26%)
Diamond Hill Capital 485,384 sh (+16.27%)
RS Investment Management 183,894 sh (+15.78%)
Paul Tudor Jones 42,804 sh (+10.68%)
Bill Nygren 812,000 sh (+6.56%)
Ken Fisher 866,577 sh (+5.39%)
Mairs and Power 493 sh (+2.28%)
Pioneer Investments 563,702 sh (+2.25%)
First Eagle Investment 645,425 sh (+1.67%)
First Pacific Advisors 240,359 sh (+0.95%)
Mario Cibelli 2,800 sh (unchged)
Tweedy Browne Global Value 76,000 sh (unchged)
Steven Romick 220,014 sh (unchged)
Tom Russo 1,233 sh (unchged)
Charles de Vaulx 18,655 sh (unchged)
Tom Gayner 12,500 sh (unchged)
Wallace Weitz 53,650 sh (unchged)
Jeff Auxier 515 sh (unchged)
Wintergreen Fund 30,094 sh (unchged)
David Winters 34,023 sh (unchged)
David Tepper Sold Out
Tweedy Browne 140,120 sh (-0.01%)
PRIMECAP Management 2,690,489 sh (-0.04%)
Dodge & Cox 1,294,066 sh (-0.21%)
Ruane Cunniff 579,029 sh (-0.45%)
Mario Gabelli 9,887 sh (-1.15%)
Murray Stahl 35,118 sh (-4.49%)
Frank Sands 2,134,139 sh (-4.54%)
Chris Davis 1,679,386 sh (-4.76%)
NWQ Managers 77,442 sh (-9.60%)
Jeremy Grantham 1,660,147 sh (-26.21%)
Robert Karr 2,607 sh (-34.23%)
Julian Robertson 15,796 sh (-36.04%)
» More
Q3 2015

GOOGL Guru Trades in Q3 2015

John Griffin 250,000 sh (New)
John Burbank 24,930 sh (+452.16%)
Jim Simons 257,648 sh (+371.02%)
Leon Cooperman 482,749 sh (+125.94%)
Ray Dalio 40,226 sh (+89.83%)
Ron Baron 25,776 sh (+22.51%)
Mairs and Power 583 sh (+18.26%)
Steven Cohen 337,180 sh (+10.99%)
Ken Fisher 915,214 sh (+5.61%)
Mario Gabelli 10,437 sh (+5.56%)
Tom Russo 1,268 sh (+2.84%)
First Pacific Advisors 242,578 sh (+0.92%)
Steven Romick 220,277 sh (+0.12%)
David Winters 34,023 sh (unchged)
Tom Gayner 12,500 sh (unchged)
Mario Cibelli 2,800 sh (unchged)
Jeff Auxier 515 sh (unchged)
Tweedy Browne Global Value 76,000 sh (unchged)
David Carlson 38,000 sh (unchged)
Robert Karr 2,607 sh (unchged)
Charles de Vaulx 18,655 sh (unchged)
Wintergreen Fund 30,094 sh (unchged)
Pioneer Investments Sold Out
Tweedy Browne 140,025 sh (-0.07%)
Dodge & Cox 1,280,966 sh (-1.01%)
First Eagle Investment 636,200 sh (-1.43%)
Diamond Hill Capital 470,066 sh (-3.16%)
PRIMECAP Management 2,594,554 sh (-3.57%)
Frank Sands 2,049,373 sh (-3.97%)
NWQ Managers 74,371 sh (-3.97%)
Larry Robbins 510,294 sh (-4.18%)
Louis Moore Bacon 32,500 sh (-4.41%)
Manning & Napier Advisors, Inc 590,917 sh (-5.84%)
David Rolfe 405,459 sh (-6.33%)
Ruane Cunniff 536,843 sh (-7.29%)
Andreas Halvorsen 2,534,329 sh (-7.38%)
Murray Stahl 32,437 sh (-7.63%)
Wallace Weitz 48,570 sh (-9.47%)
Paul Tudor Jones 38,266 sh (-10.60%)
RS Investment Management 157,648 sh (-14.27%)
Jeremy Grantham 1,300,390 sh (-21.67%)
Bill Nygren 612,000 sh (-24.63%)
Chris Davis 1,093,130 sh (-34.91%)
Julian Robertson 2,396 sh (-84.83%)
» More
Q4 2015

GOOGL Guru Trades in Q4 2015

Stanley Druckenmiller 32,800 sh (New)
Steve Mandel 404,297 sh (New)
George Soros 65,570 sh (New)
Caxton Associates 24,400 sh (New)
Pioneer Investments 723,236 sh (New)
Jerome Dodson 25,000 sh (New)
Louis Moore Bacon 91,766 sh (+182.36%)
John Griffin 358,000 sh (+43.20%)
Paul Tudor Jones 50,900 sh (+33.02%)
Steven Cohen 378,100 sh (+12.14%)
Ken Fisher 949,014 sh (+3.69%)
First Pacific Advisors 247,687 sh (+2.11%)
RS Investment Management 157,915 sh (+0.17%)
Mario Cibelli 2,800 sh (unchged)
Tom Gayner 12,500 sh (unchged)
Mairs and Power 583 sh (unchged)
Tweedy Browne Global Value 76,000 sh (unchged)
Robert Karr 2,607 sh (unchged)
Tom Russo 1,268 sh (unchged)
Jeff Auxier 515 sh (unchged)
Julian Robertson 2,396 sh (unchged)
David Carlson 38,000 sh (unchged)
Steven Romick 220,277 sh (unchged)
Charles de Vaulx 18,655 sh (unchged)
Spiros Segalas 2,188,683 sh (unchged)
Mario Gabelli Sold Out
Jim Simons Sold Out
Ray Dalio Sold Out
Tweedy Browne 139,745 sh (-0.20%)
John Burbank 24,796 sh (-0.54%)
PRIMECAP Management 2,577,639 sh (-0.65%)
Ruane Cunniff 519,685 sh (-3.20%)
Frank Sands 1,969,576 sh (-3.89%)
Murray Stahl 30,779 sh (-5.11%)
NWQ Managers 70,121 sh (-5.71%)
Ron Baron 24,272 sh (-5.83%)
Diamond Hill Capital 422,126 sh (-10.20%)
Manning & Napier Advisors, Inc 527,043 sh (-10.81%)
Leon Cooperman 427,619 sh (-11.42%)
Chris Davis 943,472 sh (-13.69%)
Dodge & Cox 1,099,716 sh (-14.15%)
First Eagle Investment 527,854 sh (-17.03%)
David Rolfe 310,914 sh (-23.32%)
David Winters 25,236 sh (-25.83%)
Andreas Halvorsen 1,853,460 sh (-26.87%)
Wintergreen Fund 21,307 sh (-29.20%)
Jeremy Grantham 638,864 sh (-50.87%)
Larry Robbins 228,811 sh (-55.16%)
Bill Nygren 217,000 sh (-64.54%)
Wallace Weitz 205 sh (-99.58%)
» More
Q1 2016

GOOGL Guru Trades in Q1 2016

Ken Fisher 973,292 sh (+2.56%)
Jerome Dodson 25,000 sh (unchged)
Steven Romick 220,277 sh (unchged)
Tweedy Browne Global Value 76,000 sh (unchged)
Manning & Napier Advisors, Inc 294,544 sh (-44.11%)
Murray Stahl 15,037 sh (-51.15%)
First Eagle Investment 197,337 sh (-62.62%)
Spiros Segalas 2,143,795 sh (-2.05%)
» More
» Details

Insider Trades

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Guru Investment Theses on Alphabet Inc

Wallace Weitz Comments on Alphabet - Apr 22, 2016

Alphabet (NASDAQ:GOOGL) is a multinational technology company generally specializing in Internet related services and products. Alphabet’s core search business (Google) delivered strong operating results which eased investor fears that the company’s primary search advertising products would not be as relevant on mobile phones as on desktops. Alphabet’s shares rose, as investors priced in a higher rate of long-term growth, renewed operating expense discipline and the announcement of the company’s first capital return program. We opportunistically trimmed our position, as the stock price approached our estimate of business value.

From Wallace Weitz (Trades, Portfolio)'s Weitz Value Fund 1st quarter 2016 commentary.

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Baron Funds Comments on Alphabet Inc. - Feb 15, 2016

We think a phenomenon some investors refer to as “pattern recognition” is largely responsible for the strong performance of the shares of Alphabet Inc. (NASDAQ:GOOGL), up 43% in 2015. During the third quarter, the company, still commonly referred to as Google, announced a change in the corporate structure and the creation of a “holdco,” named Alphabet, which would hold Google’s core search engine business and separate out their newer, less mature endeavors such as Google Fiber, Artificial Intelligence, Calico (Google’s foray into longevity), and others. Google veteran Sundar Pichai has become the CEO of Google Inc., a subsidiary of Alphabet, allowing Google’s co-founders Larry Page and Sergey Brin to spend more time on Alphabet’s other businesses. We continue to believe that Google is one of the most innovative companies on Earth, with a powerful business model that benefits from the network effect, and the greatest collection of human talent in any one place in the world. Data is becoming increasingly more important and they own more data than any other company we know. We think the value of that data and its monetization opportunities will become more apparent over time.





From Baron Funds' Global Advantage Fund letter for the fourth quarter 2015.



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Baron Funds Comments on Alphabet Inc. - Feb 08, 2016

Google Inc.’s new corporate name is Alphabet Inc. (NASDAQ:GOOGL) With the change, the company instituted a new holdco structure that gives management more direct oversight over its newer businesses such as Google Fiber and Calico. Alphabet’s shares rose on the strength of fourth quarter results that exceeded Street expectations. We believe that even while desktop search becomes a more mature business for the company, the company is well positioned to benefit from substantial growth in mobile and online video advertising. (Ashim Mehra)



From the Baron Funds Opportunity Fund fourth quarter 2015 commentary.



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Longleaf Partners Comments on Alphabet - Jan 22, 2016

Alphabet (NASDAQ:GOOGL) (formerly named Google) gained 51% for the year on the back of a 25% rise in the fourth quarter. The company reported strong revenue growth year-over-year across the U.S., U.K., and the rest of the world. The bear case that the move to mobile search would be detrimental to revenues and market share seemed to fade. Mobile queries now outnumber desktop queries in important countries, and mobile revenue per click is improving. Alphabet segment YouTube’s growth remained strong, and the company announced a new pay tier named Red. Disclosure should improve with new reporting of segments in January. During the fourth quarter, a new share buyback program was authorized, further affirming the company’s attention to capital allocation.



From Longleaf Partners Fund 4th quarter commentary.



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Wallace Weitz Comments on Alphabet - Jan 22, 2016

Alphabet (NASDAQ:GOOGL) is a multinational technology company generally specializing in internet related services and products. Alphabet’s core search business delivered strong operating results which eased investor fears that the company’s primary search advertising products would not be as relevant on mobile phones as on desktops. Additionally, the share price also rose due to the company’s decision to provide more financial information on individual operating units beginning in 2016. We believe this is a positive move, as it may entail further disclosures of both the highly profitable Google Internet Services business and the company’s other venture investments. We trimmed our position during the fourth quarter as the stock price approached our estimate of business value.



From Wallace Weitz (Trades, Portfolio)'s fourth quarter 2015 Value Fund commentary.



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Oakmark Comments on Alphabet - Jan 08, 2016

Alphabet (NASDAQ:GOOGL) (formerly Google) (U.S.), the leading Internet search engine, was the top contributor for the quarter, returning 25%. Alphabet’s share price reacted positively to third-quarter results in which both earnings and revenues exceeded market expectations. Importantly, the company also reported accelerating constant currency revenue growth of 21%. This high quality growth was the product of gains across all important segments; the fastest growth occurred in Google Sites (Search, YouTube, Gmail, etc.), which provide the company’s most profitable revenue. Alphabet’s mobile division also grew substantially, which eased concerns that the shift to mobile computing would harm the company’s profitability. We believe that Alphabet will benefit from a very strong tailwind as advertising continues to move online.



From Oakmark Global Select Fund's fourth quarter 2015 commentary.



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Wallace Weitz Comments on Google - Nov 06, 2015

Google (NASDAQ:GOOGL) is a multinational technology company generally specializing in Internet related services and products. Google’s stock price increased as reported earnings exceeded expectations due to better expense controls and accelerated revenue growth in Google’s core search businesses, where mobile search and YouTube showed particular strength. Furthermore, CFO Ruth Porat provided some hope of returning some of Google’s excess cash to shareholders. While we remain unconvinced that controlling shareholders Brin and Paige will return cash to shareholders as Porat’s comments suggest, we would welcome it as it would provide additional upside to our base case valuation. In addition, the stock price was also helped by the announcement of the creation of a holding company called Alphabet, implemented on Oct. 2, which will consist of several subsidiaries the largest of which will be the Google Internet Services (search, apps, android, YouTube etc.). Alphabet will hold several other companies that used to sit inside Google which represent longer term initiatives not directly related to Internet Services such as Nest, Calico Healthcare and Google Fiber. We believe this is a positive move as it may entail further disclosures of both the highly profitable Google Internet Services business and the company’s other venture investments.

From Wallace Weitz (Trades, Portfolio)'s Partners Value Fund commentary for third quarter 2015.

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Southeastern Asset Management Comments on Google - Oct 22, 2015

The portfolio’s largest contributor during the quarter, Google (NASDAQ:GOOGL), rose 17% on the back of strong operating results and an announced new corporate structure. The company’s core search and display business demonstrated healthy, accelerating organic revenue growth. The move to mobile search is helping Google, rather than hurting it as some bears had feared. YouTube is also performing well, as its average viewing session per user on a mobile device is over 40 minutes, up more than 50% year-over-year. Beginning in the fourth quarter, Alphabet Inc. will replace Google Inc. as the publicly-traded entity. Google will become a wholly-owned subsidiary of Alphabet, and all outstanding Google shares will convert into the same number of shares of Alphabet. This means the company will report two segments—the search and YouTube core business and all other business lines. Management believes the new structure will allow for more management scale and accountability as each Alphabet subsidiary will have its own CEO. Larry Page, Sergey Brin, and Ruth Porat will remain in their same roles as CEO and Co-Founder, Co-Founder, and Chief Financial Officer.

From Mason Hawkins (Trades, Portfolio)' Longleaf Partners third quarter 2015 shareholder commentary.

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Bill Nygren and David Herro Comments on Google - Oct 08, 2015

Another positive contributor to performance for the quarter was Google (NASDAQ:GOOGL) (U.S.), the leading Internet search engine. Google delivered a positive second-quarter earnings report that beat market expectations. We were pleased to see that aggregate paid clicks were up 18% and that paid clicks on Google websites were up 30%. Investors were encouraged by CFO Ruth Porat’s favorable comments on “balance sheet efficiency” and “maximizing shareholder value,” which reaffirm to us that CEO Larry Page is serious about running Google with shareholders in mind. We continue to believe that Google enjoys a very strong tailwind as advertising continues to move online.

From Biill Nygren and David Herro (Trades, Portfolio)'s Q3 Oakmark Global Select Fund commentary.

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David Winters of Wintergreen Fund Comments on Google - Sep 03, 2015

Google (NASDAQ:GOOGL), which had for a time been an underperformer while seemingly the rest of the tech sector rallied, is transitioning into a new phase of fiscal responsibility with the hiring of Ruth Porat, former chief financial officer of Morgan Stanley (MS). She is the key variable that brings greater professionalization in the massive company’s financial conduct, which means a greater focus on returning cash to shareholders instead of chasing founder ideas that are outside Google’s core business. With the recent announcement of the establishment of Alphabet Inc. as a parent company, which effectively separates Google from all the other non-core businesses, it appears that a new era of financial stewardship has begun. The increased clarity that this reorganization provides is a boost to our view that Google scores well in our three-prong investment criteria.



From the Wintergreen Fund (Trades, Portfolio) semiannual report 2015.



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Sequoia Fund Comments on Google - Aug 28, 2015

Chase Sheridan:



Great question. When people ask me about risks to Google (NASDAQ:GOOGL), hubris is one of the primary risks that it faces because the core business is so good. Management is investing really, really heavily in being the aggressor in a lot of areas — the opposite of a milker. Some people milk their businesses. Google is putting the milk back in the cow. With its capital allocation strategy, I will start by looking backwards and saying I thought that Google overpaid for YouTube at the time. I thought that Google overpaid for DoubleClick at the time. Looking back, those were both great acquisitions. I would certainly advise Google to do them again.



Android was a very insightful acquisition. The acquisition and development of Android were spearheaded by Larry Page, who was very involved in the project. Android has become an enormous asset for the company. I will say that second guessing Larry Page has proven to be a humbling experience. Management is extremely farsighted when it comes to the direction that technology is moving. That said, I think the reason we did not put on a bigger position in Google at the time we bought it was that we perceived — I think a lot of investors perceived correctly — that shareholders are not first in line when it comes to the buffet of cash flow that Google produces. Larry Page has very large ambitions and the joke around here is Google generates more cash than its managers know what to do with, and the fear is that Larry Page is going to use it to colonize Mars. I think Google will start paying a dividend ten years after Larry Page’s death. I do not want to second-guess management, but I really cannot handicap very well what the company’s investments now are going to look like in ten years.



I will say this: A lot of the products that get a lot of press are really not material to Google’s overall results. If you look at Google Fiber, if you look at Google’s recent moves in the wireless industry, these are points of leverage that Google is finding to pressure the rest of the ecosystem to invest, to improve access to the Internet for all users, which ultimately benefits Google. It does not require very much money and Google is actually getting responses from folks like AT&T speeding up fiber access. So I do not think that these projects that we are reading about like driverless cars — they are interesting, but I do not think that the resources that they consume are significant in the context of Google’s overall earnings power. When I look over the next five years, I think that Google could create $100 billion of profits. So I am going to give management the benefit of the doubt for now. But it is a good question and I do not have a great answer for it.



....



Question:



Could you please share your point of view about margins at Google and stock options?



Chase Sheridan:



Net margins at Google have been declining rather rapidly as the company has expanded into non-search businesses. Search is such a high margin business that nothing is going to compare. But in addition to the display business and other businesses that Google is currently monetizing, management is planting a lot of seeds elsewhere. So the margins have come down over time. If you are looking solely at the growth of net income or EPS — let’s go to the EPS line — if you are looking solely at EPS growth, it does not look that compelling. That is because Google is being penalized for an enormous amount of growth investing.



However, Google trades at a very modest premium to the S&P. If you look at its enterprise value to net operating profit after taxes, which is a way that you would look at it to give the company credit for the $60 billion of cash on the balance sheet and some intangible amortization, it is about 19 times forward looking, 2015, ballpark. The S&P is in the 17 − 18 range for its forward P/E. Meanwhile Google grew at 18.9% last year and the S&P in aggregate grew about 4.2%. So if you are taking a long view, you do have to have some faith that some of Google’s investments that are not currently benefiting the EPS line are going to work out. It does not have to be a lot of them but Google is planting a lot of seeds in a lot of places.



With regard to stock options, Google has a policy of compensating its employees very well. I think the intention is to try to create a place for the very best talent in the world to congregate and to avoid becoming a big stale company. I would say Google is on its way. The goal seems to be to create in the twenty-first century what Bell Labs and Xerox PARC were in the twentieth. Stock options are a part of that. They are expensed so it is already included in the math. The grants are very generous, but Google does get outstanding talent.



...



Question:



Two questions, one on Google. Maybe some more commentary on how you think the transition to mobile is going. I know that is a tricky question, but some thoughts on that. Then on Perrigo, any comment on the current Mylan offer/bid, and whether or not that company ultimately will remain independent now that it is technically in play.



Chase Sheridan: I took a peek at Google’s market shares and how they have changed over the last twelve months. Google’s market share in mobile browsers, Chrome and Android combined, went from 37% to 48%. The company’s market share in mobile search went from 91% to 92% globally. And the market share of the mobile operating system, which is the Android OS in all of its forms, from 37% to 52%. It is worth pointing out that Google’s share in mobile search is actually quite a bit higher than its market share in desktop search. The transition to mobile is fraught with all kinds of potential pitfalls, but Google was very early in emphasizing mobile with Android.



The worry for a lot of Google followers is that people tend to spend a lot of their time in apps on mobile devices; so the worry is that as apps predominate in terms of taking users eyeballs away, mobile search use may decline. As it turns out, people still do a lot of searching on their mobile phones through the browser, which is how Google makes the bulk of its mobile money. But it also has a pretty robust display business, and the company is doing what it can to maximize its presence there. I am going to pull a number from memory, but I believe that Google has something like 37% of all mobile advertising. It has a tremendously strong position. In terms of just the advertising technology stack that Google owns, there is nobody who comes close. That is sort of an unholy mess, but it is consolidating and it is consolidating into a couple of large platforms. Google will own one of them. Facebook will own one of them, and then we will see what else shakes out. But Google has a tremendously strong position in mobile. The company has navigated that transition better than I would have expected. Google saw it coming before most of us did.



From Ruane, Cunniff & Goldfarb Investor Day 2015 Transcript Part II - Sequoia Fund.



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Baron Funds Comments on Google Inc. - Aug 19, 2015

We reinvested in Google, Inc. (NASDAQ:GOOGL), the world’s leading search provider; the owner of YouTube, the world’s leading Internet video service; and the provider of Android, the world’s most popular mobile operating system. We believe that Google will be more successful with its mobile transition (like Facebook before it) than the naysayers believe, that YouTube has significant monetization potential, and that Google possesses the assets and relationships to make it a major player in people-based digital advertising.





From Baron Funds’ second quarter 2015 commentary.





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Chris Davis Comments on Google - Jun 24, 2014

Google (GOOGL), an example of a market leader in the Portfolio, globally dominates the business of online search with a market share of more than 65%. We consider Google a new generation media company with a business model that is exceptionally well positioned to capitalize on the continuing transition from traditional print and television media to Internet-based content and advertising. With advertising representing about 95% of its revenue, Google is one of the largest advertising companies in the world. Financially strong, Google is a cash flow machine with no net debt and ample liquidity provided by its substantial cash balances.



From Chris Davis' Davis New York Venture Fund First Quarter 2014 Update.



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Top Ranked Articles about Alphabet Inc

Wallace Weitz Comments on Alphabet Guru stock highlight
Alphabet (NASDAQ:GOOGL) is a multinational technology company generally specializing in Internet related services and products. Alphabet’s core search business (Google) delivered strong operating results which eased investor fears that the company’s primary search advertising products would not be as relevant on mobile phones as on desktops. Alphabet’s shares rose, as investors priced in a higher rate of long-term growth, renewed operating expense discipline and the announcement of the company’s first capital return program. We opportunistically trimmed our position, as the stock price approached our estimate of business value. Read more...
S&P 500 Tech Companies: Watch Their Noses Lengthen A look at the continued exclusion of stock-based compensation from reported earnings
Back in 2014, I wrote an article that discussed Google's, now Alphabet’s (GOOG) (GOOGL), use of non-GAAP earnings when reporting financial results to shareholders. The most notable exclusion from the company’s non-GAAP earnings was stock-based compensation, or SBC. Read more...
David Rolfe Sells Coach, Alphabet Wedgewood investor's largest trades of 4th quarter
David Rolfe (Trades, Portfolio) has been managing Wedgewood Partners' portfolio for 18 years. The following were his most heavily weighted trades during the fourth quarter. Read more...
Wallace Weitz Reduces Stake in Oracle Guru also trims holdings in Alphabet components in 4th quarter
The number of stakes Wallace Weitz (Trades, Portfolio), portfolio manager of Weitz Value Fund, Weitz Hickory Fund and Weitz Partners Value Fund, reduced in the fourth quarter far outnumbered his new buys, exited positions and adds to existing stakes. Read more...
Apple or Alphabet: Race to a Trillion-Dollar Valuation Together they're valued at $1.03 trillion, but one will get to that capitalization first
Considering the influence these two companies have on the world we live in, it’s virtually assured that one or the other will be the first trillion-dollar company. Placing cash on either stock at this point will double your money unless the world fundamentally changes. How long before an investor can realize 100% will depend on whether the companies can continue to expand their brand presence in the market. Read more...
GAMCO Global Growth Fund Comments on Alphabet Inc. Guru stock highlight
Alphabet Inc. (NASDAQ:GOOGL)(NASDAQ:GOOG) (2.2% of net assets as of December 31, 2015) (GOOG - $758.88 – NASDAQ, GOOGL – $778.01 – NASDAQ) is the parent company of Google, which is widely recognized as the world’s leading Internet search engine. Google’s stated mission is to organize the world’s information and make it universally accessible and useful. Google generates revenue by providing advertisers with the opportunity to deliver measurable, cost effective online advertising that is relevant to the information displayed on any given webpage. This makes the advertising useful to consumers as well as to the advertiser placing it. We believe this highly innovative and fast growing company is uniquely positioned to create new market opportunities while maintaining its lead in online search. Read more...
Wallace Weitz Exits Stake in Alphabet, Cuts Oracle Weitz's largest 4th quarter sells
Wallace Weitz (Trades, Portfolio) established Weitz Investment Management in 1983. During the fourth quarter, he sold out many of his holdings. Read more...
Pioneer Investments Acquires 50 New Stakes Guru purchases 2 components of Alphabet stock
Pioneer Investments (Trades, Portfolio) made 50 new buys in the fourth quarter. That is nearly as many new buys as Pioneer made in the third quarter, but it is also the guru’s fewest new buys since the third quarter of 2014. Read more...
Baron Funds Comments on Alphabet Inc. Guru stock highlight
We think a phenomenon some investors refer to as “pattern recognition” is largely responsible for the strong performance of the shares of Alphabet Inc. (NASDAQ:GOOGL), up 43% in 2015. During the third quarter, the company, still commonly referred to as Google, announced a change in the corporate structure and the creation of a “holdco,” named Alphabet, which would hold Google’s core search engine business and separate out their newer, less mature endeavors such as Google Fiber, Artificial Intelligence, Calico (Google’s foray into longevity), and others. Google veteran Sundar Pichai has become the CEO of Google Inc., a subsidiary of Alphabet, allowing Google’s co-founders Larry Page and Sergey Brin to spend more time on Alphabet’s other businesses. We continue to believe that Google is one of the most innovative companies on Earth, with a powerful business model that benefits from the network effect, and the greatest collection of human talent in any one place in the world. Data is becoming increasingly more important and they own more data than any other company we know. We think the value of that data and its monetization opportunities Read more...
Baron Funds Comments on Alphabet Inc. Guru stock highlight
Google Inc.’s new corporate name is Alphabet Inc. (NASDAQ:GOOGL) With the change, the company instituted a new holdco structure that gives management more direct oversight over its newer businesses such as Google Fiber and Calico. Alphabet’s shares rose on the strength of fourth quarter results that exceeded Street expectations. We believe that even while desktop search becomes a more mature business for the company, the company is well positioned to benefit from substantial growth in mobile and online video advertising. (Ashim Mehra) Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 30.01
GOOGL's P/E(ttm) is ranked higher than
51% of the 229 Companies
in the Global Internet Content & Information industry.

( Industry Median: 30.01 vs. GOOGL: 30.01 )
Ranked among companies with meaningful P/E(ttm) only.
GOOGL' s P/E(ttm) Range Over the Past 10 Years
Min: 16.51  Med: 29.79 Max: 94.93
Current: 30.01
16.51
94.93
Forward P/E 17.86
GOOGL's Forward P/E is ranked higher than
64% of the 67 Companies
in the Global Internet Content & Information industry.

( Industry Median: 20.00 vs. GOOGL: 17.86 )
Ranked among companies with meaningful Forward P/E only.
N/A
PE(NRI) 29.10
GOOGL's PE(NRI) is ranked higher than
55% of the 226 Companies
in the Global Internet Content & Information industry.

( Industry Median: 30.11 vs. GOOGL: 29.10 )
Ranked among companies with meaningful PE(NRI) only.
GOOGL' s PE(NRI) Range Over the Past 10 Years
Min: 16.52  Med: 28.81 Max: 94.93
Current: 29.1
16.52
94.93
Price/Owner Earnings (ttm) 24.40
GOOGL's Price/Owner Earnings (ttm) is ranked lower than
51% of the 118 Companies
in the Global Internet Content & Information industry.

( Industry Median: 22.99 vs. GOOGL: 24.40 )
Ranked among companies with meaningful Price/Owner Earnings (ttm) only.
GOOGL' s Price/Owner Earnings (ttm) Range Over the Past 10 Years
Min: 13.47  Med: 19.75 Max: 32.53
Current: 24.4
13.47
32.53
P/B 3.97
GOOGL's P/B is ranked lower than
62% of the 330 Companies
in the Global Internet Content & Information industry.

( Industry Median: 2.95 vs. GOOGL: 3.97 )
Ranked among companies with meaningful P/B only.
GOOGL' s P/B Range Over the Past 10 Years
Min: 2.85  Med: 4.16 Max: 21.36
Current: 3.97
2.85
21.36
P/S 6.35
GOOGL's P/S is ranked lower than
78% of the 344 Companies
in the Global Internet Content & Information industry.

( Industry Median: 1.95 vs. GOOGL: 6.35 )
Ranked among companies with meaningful P/S only.
GOOGL' s P/S Range Over the Past 10 Years
Min: 3.98  Med: 6.54 Max: 23.25
Current: 6.35
3.98
23.25
PFCF 28.24
GOOGL's PFCF is ranked lower than
65% of the 113 Companies
in the Global Internet Content & Information industry.

( Industry Median: 25.50 vs. GOOGL: 28.24 )
Ranked among companies with meaningful PFCF only.
GOOGL' s PFCF Range Over the Past 10 Years
Min: 14.5  Med: 28.97 Max: 102.06
Current: 28.24
14.5
102.06
POCF 18.38
GOOGL's POCF is ranked higher than
50% of the 151 Companies
in the Global Internet Content & Information industry.

( Industry Median: 18.79 vs. GOOGL: 18.38 )
Ranked among companies with meaningful POCF only.
GOOGL' s POCF Range Over the Past 10 Years
Min: 11.22  Med: 18.30 Max: 75.19
Current: 18.38
11.22
75.19
EV-to-EBIT 20.86
GOOGL's EV-to-EBIT is ranked lower than
54% of the 224 Companies
in the Global Internet Content & Information industry.

( Industry Median: 19.97 vs. GOOGL: 20.86 )
Ranked among companies with meaningful EV-to-EBIT only.
GOOGL' s EV-to-EBIT Range Over the Past 10 Years
Min: 10.6  Med: 18.60 Max: 68.1
Current: 20.86
10.6
68.1
EV-to-EBITDA 16.55
GOOGL's EV-to-EBITDA is ranked lower than
51% of the 247 Companies
in the Global Internet Content & Information industry.

( Industry Median: 16.07 vs. GOOGL: 16.55 )
Ranked among companies with meaningful EV-to-EBITDA only.
GOOGL' s EV-to-EBITDA Range Over the Past 10 Years
Min: 9.1  Med: 14.90 Max: 57.9
Current: 16.55
9.1
57.9
PEG 2.03
GOOGL's PEG is ranked lower than
62% of the 73 Companies
in the Global Internet Content & Information industry.

( Industry Median: 1.42 vs. GOOGL: 2.03 )
Ranked among companies with meaningful PEG only.
GOOGL' s PEG Range Over the Past 10 Years
Min: 0.21  Med: 0.81 Max: 2.43
Current: 2.03
0.21
2.43
Shiller P/E 49.32
GOOGL's Shiller P/E is ranked lower than
56% of the 25 Companies
in the Global Internet Content & Information industry.

( Industry Median: 49.20 vs. GOOGL: 49.32 )
Ranked among companies with meaningful Shiller P/E only.
GOOGL' s Shiller P/E Range Over the Past 10 Years
Min: 42.46  Med: 51.61 Max: 62.6
Current: 49.32
42.46
62.6
Current Ratio 5.14
GOOGL's Current Ratio is ranked higher than
83% of the 349 Companies
in the Global Internet Content & Information industry.

( Industry Median: 2.06 vs. GOOGL: 5.14 )
Ranked among companies with meaningful Current Ratio only.
GOOGL' s Current Ratio Range Over the Past 10 Years
Min: 3.5  Med: 6.04 Max: 14.97
Current: 5.14
3.5
14.97
Quick Ratio 5.14
GOOGL's Quick Ratio is ranked higher than
84% of the 349 Companies
in the Global Internet Content & Information industry.

( Industry Median: 1.96 vs. GOOGL: 5.14 )
Ranked among companies with meaningful Quick Ratio only.
GOOGL' s Quick Ratio Range Over the Past 10 Years
Min: 3.5  Med: 6.04 Max: 14.97
Current: 5.14
3.5
14.97
Days Sales Outstanding 50.63
GOOGL's Days Sales Outstanding is ranked higher than
51% of the 288 Companies
in the Global Internet Content & Information industry.

( Industry Median: 51.67 vs. GOOGL: 50.63 )
Ranked among companies with meaningful Days Sales Outstanding only.
GOOGL' s Days Sales Outstanding Range Over the Past 10 Years
Min: 44.25  Med: 52.08 Max: 57.36
Current: 50.63
44.25
57.36
Days Payable 20.66
GOOGL's Days Payable is ranked lower than
82% of the 261 Companies
in the Global Internet Content & Information industry.

( Industry Median: 57.29 vs. GOOGL: 20.66 )
Ranked among companies with meaningful Days Payable only.
GOOGL' s Days Payable Range Over the Past 10 Years
Min: 7.54  Med: 17.58 Max: 35.59
Current: 20.66
7.54
35.59

Valuation & Return

vs
industry
vs
history
Price/Tangible Book 4.71
GOOGL's Price/Tangible Book is ranked lower than
54% of the 285 Companies
in the Global Internet Content & Information industry.

( Industry Median: 4.32 vs. GOOGL: 4.71 )
Ranked among companies with meaningful Price/Tangible Book only.
GOOGL' s Price/Tangible Book Range Over the Past 10 Years
Min: 3.6  Med: 5.22 Max: 21.98
Current: 4.71
3.6
21.98
Price/DCF (Earnings Based) 1.02
GOOGL's Price/DCF (Earnings Based) is ranked lower than
64% of the 14 Companies
in the Global Internet Content & Information industry.

( Industry Median: 0.99 vs. GOOGL: 1.02 )
Ranked among companies with meaningful Price/DCF (Earnings Based) only.
N/A
Earnings Yield (Greenblatt) (%) 4.77
GOOGL's Earnings Yield (Greenblatt) (%) is ranked higher than
65% of the 342 Companies
in the Global Internet Content & Information industry.

( Industry Median: 2.40 vs. GOOGL: 4.77 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
GOOGL' s Earnings Yield (Greenblatt) (%) Range Over the Past 10 Years
Min: 1.5  Med: 5.40 Max: 9.5
Current: 4.77
1.5
9.5
Forward Rate of Return (Yacktman) (%) 16.23
GOOGL's Forward Rate of Return (Yacktman) (%) is ranked higher than
50% of the 105 Companies
in the Global Internet Content & Information industry.

( Industry Median: 17.77 vs. GOOGL: 16.23 )
Ranked among companies with meaningful Forward Rate of Return (Yacktman) (%) only.
GOOGL' s Forward Rate of Return (Yacktman) (%) Range Over the Past 10 Years
Min: 16.4  Med: 27.70 Max: 80.8
Current: 16.23
16.4
80.8

More Statistics

Revenue(Mil) $77988
EPS $ 23.75
Beta0.88
Short Percentage of Float1.14%
52-Week Range $532.20 - 810.35
Shares Outstanding(Mil)686.56

Analyst Estimate

Dec16 Dec17 Dec18
Revenue(Mil) 79,032 90,217 109,541
EPS($) 33.76 39.82 44.50
EPS without NRI($) 33.76 39.82 44.50

Business Description

Industry: Online Media » Internet Content & Information
Compare:NAS:FB, HKSE:00700, NAS:BIDU, JSE:NPN, NAS:JD » details
Traded in other countries:GOOGL.Argentina, GOOG34.Brazil, GOOG.Chile, ABEA.Germany, GOOGL.Mexico, GOOGL.Peru, GOOGL.Switzerland, 0R0I.UK,
Alphabet Inc was incorporated in California on September 4, 1998 and reincorporated in Delaware in August 2003 as Google Inc. The Company changed its name from Google Inc to Alphabet Inc on October 5, 2015; and created a new entity named Google Inc which became the wholly owned direct subsidiary of Alphabet Inc the new public holding company. The Company operates through subsidiaries including Google Inc which is engaged in improving the ways people connect with information. The Google Inc products include Search, Android, YouTube, Apps, Maps and Ads. The Company's Search technologies sort through an ever-growing amount of information to deliver relevant and useful search results in response to user queries. It integrates features into its search service and offers specialized search services to help users tailor their searches. In addition, the Company provides its search technology for use within enterprises through the Google Search Appliance, on their public-facing sites with Google Site Search, and Google Commerce Search. The Company's Android a mobile operating system based on the Linux kernel, designed for touchscreen mobile devices such as smartphones and tablets. Android's user interface is based on direct manipulation, using touch gestures that loosely correspond to real-world actions. Google TV is a platform that enables the consumers the power to experience television and the Internet on a single screen with the ability to search and find the content one wants to watch. The Google TV platform is based on the Android operating system. The Company's YouTube product allows people to discover, watch and share originally-created videos. YouTube provides a forum for people to connect, inform, and inspire others across the globe and acts as a distribution platform for original content creators and advertisers large and small. Through Google Apps, which includes Gmail, Google Docs, Google Calendar, and Google Sites, among other features, the Company provides hosted, web-based applications that people can use on any device with a browser and an Internet connection. The Company also provides versions of its Google Maps Application Programming Interface (API) for businesses, as well as Google Earth Enterprise (a behind-the-company-firewall software solution for imagery and data visualization). Google AdWords is an auction-based advertising program that enables performance advertisers to place text-based and display ads on Google websites and Google Network Member's websites. Google AdSense refers to the online programs through which the Company distributes its advertisers' AdWords ads for display on Google Network Members' websites. Google's enterprise products provide Google technology for business settings. The Company also operates other business through its other subsidiaries including Calico an Anti-aging research & development company; Nest producing internet-connected home devices; Fiber providing high speed internet serv
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