Should You Buy Google Stock? #Shorts

Bullish Studio

I did a quick analysis of Alphabet (GOOG) stock this morning.   The stock now trades at around 12 x earnings.   It’s also around 4 x revenue and 23 x free cash flow.  That’s pretty good considering the company has grown earnings 26% per year over the last five years.  Personally I think Google is looking pretty good value here. Certainly when compared to other stocks on the market.  Full disclosure: I am long GOOG myself and these are my personal opinions not financial advice. #investing #stockmarket #overlookedalpha

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00:00 Should you buy Google stock?

00:01 On a valuation basis, Google is cheap.

00:04 Earnings over the last 12 months is about $97 billion.

00:07 Google's enterprise value is 1.2 trillion.

00:10 So we're down to about 12 times earnings

00:13 or four times revenue, 23 times free cashflow.

00:16 That's pretty good seeing the company's great earnings

00:19 26% per year over the last five years.

00:21 If we're moving into a recession,

00:23 that's gonna mean a decrease on Google ad prices.

00:26 That's gonna put pressure on the earnings

00:28 and expand this PE ratio.

00:30 Also, Google's other businesses like Google Cloud,

00:33 Waymo and Verily are still loss-making.

00:35 So let's say Google grows earnings at around 15% per year

00:39 and trades at 18 times EBITDA.

00:41 That's gonna give you a return of around 20% per year.

00:44 So let's say the company grows earnings around 10% per year.

00:47 That will give you a return of around 14.7% per year.

00:51 That's pretty good.

00:52 I think Google is looking pretty good here.

00:53 It's obviously a quality company.

00:54 It's not outrageously cheap,

00:56 but it's a better value than many of the other stocks out there right now.

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