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 its shares currently priced at $165.53, Alphabet Inc has experienced a daily gain of 1.02% and an impressive three-month increase of 16.22%. A detailed analysis, supported by the GF Score, indicates that Alphabet Inc is poised for significant 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 have been backtested from 2006 to 2021, showing a strong correlation with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. Alphabet Inc boasts a GF Score of 97 out of 100, indicating a high potential for outperformance.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
Understanding Alphabet Inc's Business
Alphabet Inc, with a market cap of $2.06 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 sales like Chromebooks and Pixel smartphones, generate the majority of Alphabet's revenue. Additionally, Google's cloud computing services contribute significantly, while Alphabet's other bets focus on innovative technologies in health, internet access, and autonomous driving.
Financial Strength Breakdown
Alphabet Inc's financial strength is evident in its robust balance sheet and impressive financial ratios. The company's Interest Coverage ratio stands at 286.8, significantly above the benchmark, indicating strong capability to meet interest obligations. The Altman Z-Score of 13.24 further underscores its financial stability, while a Debt-to-Revenue ratio of 0.09 highlights prudent debt management.
Profitability and Growth Metrics
Alphabet Inc's profitability is top-notch, with an increasing Operating Margin over the past five years, reaching 27.42% in 2023. The company's Gross Margin also reflects efficiency, maintaining a level above 55% in recent years. Growth is equally strong, with a 3-Year Revenue Growth Rate of 22.1%, outperforming most peers in the Interactive Media industry.
Conclusion
Considering Alphabet Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
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.
