As investors parse through earnings for major big tech companies, GuruFocus users can compare financial strength, profitability, valuation, growth and momentum indicators for multiple companies using the Stock Comparison Table, a Premium feature.
Shares of Alphabet Inc. (GOOGL, Financial) traded around $95.94 on Wednesday, down over 8% on the back of reporting third-quarter earnings that missed top-line and bottom-line consensus estimates. Revenue of $69.09 billion was up just 6% from third-quarter 2021 revenue of $65.12 billion. A year ago, revenue increased by 41% year over year.
Shares of the Mountain View, California-based online search giant are significantly undervalued based on the company's price-to-GF Value ratio of 0.67.
Likewise, shares of Meta Platforms Inc. (META, Financial) tumbled more than 11% after the closing bell on the back of reporting third-quarter earnings of $1.64 per share, down from the Refinitiv consensus estimate of $1.89 per share.
Although Meta’s third-quarter revenue of $27.71 billion topped consensus estimates of $27.38 billion, fourth-quarter expected revenue of between $30 billion and $32.5 billion falls below the consensus estimate of $32.2 billion.
Shares of Meta are significantly undervalued based on the company’s price-to-GF Value ratio of 0.34 as of Wednesday.
Fundamental overview
Alphabet has a GF Score of 97 out of 100, driven by a growth rank of 10 out of 10, a momentum rank of 7 out of 10 and a rank of 9 out of 10 for profitability, GF Value and financial strength.
Likewise, Meta Platforms has a GF Score of 93 out of 100: Although the stock has a rank of 10 out of 10 for profitability and growth, the Menlo Park, California-based social media giant has a financial strength rank of 8 out of 10, a momentum rank of 5 out of 10 and a GF Value rank of 4 out of 10.
Profitability comparison
Figure 1 illustrates a sample profitability comparison table for Alphabet and Meta Platforms.
Figure 1
As Figure 1 illustrates, Meta Platforms’ profit margins are slightly higher than those for Alphabet: Meta’s gross margin of 80.47% outperforms approximately 69.41% of global competitors, while Alphabet’s gross margin of 56.74% underperforms approximately 53.54% of global interactive media companies.
Meta’s profitability ranks 10 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that outperforms more than 91% of global competitors. Additionally, Meta’s return on equity and assets outperform approximately 85% and 91% of global interactive media companies.
On the other hand, Alphabet’s profitability ranks 9 out of 10 on the back of business predictability ranking just two stars out of five despite operating margins outperforming approximately 88% of global competitors and returns on equity and assets outperforming more than 90% of global interactive media companies.
Growth comparison
Figure 2 illustrates a sample growth comparison table for Alphabet and Meta Platforms.
Figure 2
As Figure 2 illustrates, Meta Platforms has a faster 10-year book value growth rate, 10-year revenue growth rate and 10-year earnings growth rate than does Google, though Meta’s book value declined over the past year.
Meta’s growth ranks 10 out of 10 on the back of three-year revenue and free cash flow growth rates outperforming more than 70% of global competitors, while three-year earnings growth rates outperform approximately 60% of global competitors.
Likewise, Alphabet’s growth ranks 10 out of 10 on the back of three-year revenue, earnings and free cash flow growth rates outperforming more than 70% of global competitors.
Financial strength comparison
Figure 3 shows a sample financial strength and valuation comparison table for Alphabet and Meta.
Figure 3
As Figure 3 illustrates, Alphabet has a higher financial strength rank than Meta does on the back of a higher cash-to-debt ratio, a slightly lower debt-to-equity ratio and a higher Altman Z-score.
Alphabet’s financial strength ranks 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 out of 9, a high Altman Z-score of 10.94 and debt-to-Ebitda and interest coverage ratios that outperform more than 66% of global competitors.
On the other hand, Meta’s financial strength ranks 8 out of 10: Although the company has a high Altman Z-score of 7.34, Meta has a Piotroski F-score of just 4 out of 9 while debt-to-equity ratios outperform just approximately 52% of global competitors.
Valuation comparison
Figure 4 illustrates a sample valuation comparison table for Alphabet and Meta.
As Figure 4 illustrates, while both stocks are significantly undervalued based on the price-to-GF Value measure, Alphabet has a higher price-earnings ratio, price-book ratio and price-sales ratio than does Meta.
Momentum comparison
Figure 5 illustrates a sample momentum comparison table for Alphabet and Meta.
Figure 5
As Figure 5 illustrates, Meta’s 6-1 month momentum and 12-1 month momentum are lower than that of Alphabet’s. Based on the data, GuruFocus ranked Meta’s momentum just 5 out of 10, compared to 7 out of 10 for Alphabet.
