Company Introduction
Headquarters Location: Mountain View, California
Core Business Summary: Alphabet Inc., the parent company of Google, is a multinational technology company specializing in Internet-related services and products.
Overview
$245.76
26.57
9.25
$2,977.97B
Company Overview
Core Products & Services: Search, advertising, cloud computing, hardware (Pixel smartphones, Chromebooks, Nest home devices), and software (Android, Google Maps, YouTube)
Industry Sector: Technology
Industry Trends
Industry Growth: The global digital advertising market is projected to grow at a CAGR of 11.4% from 2022 to 2025.
Key Demand Drivers: Increased online presence, mobile device usage, and e-commerce activities
CAGR: 11.4
Major Competitors: Amazon, Microsoft, Facebook, Apple
Financials
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $74.99B | $90.27B | $110.86B | $136.82B | $161.86B | $182.53B | $257.64B | $282.84B | $307.39B | $350.02B |
| YoY % | +20.4% | +22.8% | +23.4% | +18.3% | +12.8% | +41.1% | +9.8% | +8.7% | +13.9% | |
| EBITDA | $24.82B | $30.42B | $34.22B | $44.06B | $51.51B | $61.91B | $103.52B | $85.16B | $97.97B | $135.39B |
| YoY % | +22.6% | +12.5% | +28.8% | +16.9% | +20.2% | +67.2% | -17.7% | +15.0% | +38.2% | |
| FCF | $16.11B | $25.82B | $23.91B | $22.83B | $30.97B | $42.84B | $67.01B | $60.01B | $69.50B | $72.76B |
| YoY % | +60.3% | -7.4% | -4.5% | +35.7% | +38.3% | +56.4% | -10.4% | +15.8% | +4.7% | |
| EPS | 1.48 | 1.72 | 1.60 | 2.19 | 2.46 | 2.94 | 5.60 | 4.55 | 5.80 | 8.05 |
| YoY % | +16.2% | -7.0% | +36.9% | +12.3% | +19.5% | +90.5% | -18.8% | +27.5% | +38.8% |
Growth Drivers
Historical Growth Drivers: Product innovation (e.g., Google Assistant, Google Cloud), new market entry (e.g., emerging markets), and strategic partnerships (e.g., with smartphone manufacturers)
Future Growth Drivers: Artificial intelligence (AI) adoption, cloud computing growth, and expansion into new markets (e.g., healthcare, finance)
Numbers And Examples: Google Cloud revenue grew 45% YoY in 2022, while YouTube ad revenue increased 25% YoY.
Market Position
Competitive Position: Leader in search and digital advertising
Estimated Market Share: Google holds around 87% of the global search market share
Technological Moat: Strong brand recognition, extensive user data, and continuous innovation
Strengths
- Diversified revenue streams
- Strong balance sheet
- Innovative culture
- Global presence
Weaknesses
- Regulatory risks
- Dependence on advertising revenue
- Competition from emerging technologies
- Cyclical exposure
Valuations
Valuations for GOOGL
| Formula | Bull | Base | Bear | Margin of Safety |
|---|---|---|---|---|
| Ben Graham | $448.63 | $356.13 | $263.63 | 31.0% |
| Peter Lynch | – | $166.72 | – | -47.4% |
Rule of thumb (Lynch):
PEG ≈ 1 → Fairly valued
PEG < 1 → Undervalued (growth cheap relative to earnings)
PEG > 1.5 → Overvalued
Outlook
Forward Looking Analysis: Over the next 3-5 years, Alphabet Inc. is expected to continue growing, driven by its dominant position in search and digital advertising, as well as its expanding cloud and hardware businesses. However, regulatory risks, competition, and cyclical exposure may pose challenges. Opportunities for growth exist in emerging markets, AI adoption, and expansion into new industries.
Opportunities Vs Risks: Balanced, with opportunities for growth outweighing risks
Stock Price Performance
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Price | 38.48 | 42.84 | 50.63 | 59.95 | 55.11 | 106.49 | 140.15 | 104.36 | 155.49 | 157.07 |
| YoY % | +11.3% | +18.2% | +18.4% | -8.1% | +93.2% | +31.6% | -25.5% | +49.0% | +1.0% |
Stock 3 Year Rolling CAGR
| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Average |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 13.92% | 14.87% | 13.45% | 10.08% | 16.76% | 15.72% | 6.06% | 7.36% | 12.28% |
| EBITDA | 11.30% | 13.15% | 14.61% | 12.01% | 26.20% | 11.21% | -1.82% | 16.71% | 12.92% |
| FCF | 14.06% | -4.02% | 9.01% | 23.34% | 29.34% | 11.89% | 1.22% | 6.63% | 11.43% |
| EPS | 2.63% | 8.39% | 15.42% | 10.31% | 31.55% | 15.67% | 1.18% | 20.95% | 13.26% |
| Price | – | 9.58% | 11.85% | 2.87% | 21.11% | 36.50% | -0.67% | 3.52% | 12.11% |
