Alphabet Inc (GOOGL, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising growth prospects. With a current share price of $177.93 and a daily gain of 1.06%, Alphabet Inc has shown a significant three-month change of 26.52%. A detailed analysis, supported by the GF Score, indicates that Alphabet Inc is poised for substantial future growth.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum. These aspects are weighted differently and have been backtested from 2006 to 2021 to correlate with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. For Alphabet Inc, the GF Score is an impressive 97 out of 100, indicating a strong potential for outperformance.
Understanding Alphabet Inc's Business
Alphabet Inc, with a market cap of approximately $2.21 trillion and annual sales of $318.15 billion, operates primarily through its subsidiary, Google. Google's services, including online ads, Google Play, YouTube, and hardware products like Pixel smartphones and Google Home, generate the majority of Alphabet's revenue. Additionally, Alphabet invests in high-potential technologies through its 'Other Bets' segment, focusing on areas such as health tech, internet services, and autonomous driving.
Financial Strength Breakdown
Alphabet Inc's financial robustness is reflected in its Financial Strength Rank of 9 out of 10. The company boasts an Interest Coverage ratio of 286.8, significantly above the benchmark, and an Altman Z-Score of 14.01, indicating low risk of financial distress. Its strategic debt management is evidenced by a Debt-to-Revenue ratio of 0.09.
Profitability Rank Breakdown
Alphabet Inc's Profitability Rank stands at a perfect 10. The company's Operating Margin has been increasing, with a current figure of 27.42%. This growth is supported by a consistent rise in Gross Margin, which currently stands at 56.63%. The Piotroski F-Score and a Predictability Rank of 5 stars further validate Alphabet's financial health and operational efficiency.
Growth Rank Breakdown
Alphabet Inc is also recognized for its growth, with a Growth Rank of 10. The company's 3-Year Revenue Growth Rate of 22.1% is notably high within its industry. This is complemented by strong EBITDA growth rates over the past three and five years, highlighting Alphabet's ongoing expansion and profitability.
Conclusion
Considering Alphabet Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score underscores the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore other high-scoring companies using the GF Score Screen available to GuruFocus Premium members.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
