Alphabet’s Fundamental Analysis



Deciphering Alphabet’s comprehensive valuation

Alphabet (GOOG) has an enterprise value (or EV) of ~$548.2 billion. Its peers have the following enterprise values: 

  • Amazon (AMZN): ~$451.2 billion 
  • Alibaba (BABA): ~$386.5 billion
  • eBay (EBAY): ~$39.9 billion 
  • Baidu (BIDU): ~$73.4 billion
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Inside Alphabet’s price metrics

With a book value per share of ~$214.30, Alphabet is trading at a price-to-book value of 4.4x. The estimated book value per share of the stock is ~$215.40 for 2017.

Alphabet’s price-to-sales ratio is 6.5x while the estimated price-to-sales ratio for 2017 is 5.9x.

Market capitalization

On August 11, Alphabet was the largest global Internet player in terms of market capitalization at ~$638.9 billion. Among its peers, Amazon’s market cap was ~$465 billion, Alibaba’s market cap was ~$388.5 billion, eBay’s market cap was ~$37.5 billion, and Baidu’s market cap was ~$77.5 billion.

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Earnings and sales

Alphabet’s EPS (earnings per share) for 2016 came on total sales of $99.3 billion, which grow 21% annually. Sales for this year are expected to expand from ~$109.0 billion in 2016 to ~$127.7 billion in 2017.

Moving averages

Moving average refers to the average price of a stock over a given period of time. On August 11, 2017, Alphabet closed the trading day at $914.39. Based on this figure, here’s how the stock fared in terms of its moving averages:

  • 0.04% above its 100-day moving average of $914.00
  • ~3.1% below its 50-day moving average of $944.00
  • ~2.8% below its 20-day moving average of $941.00
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The moving average convergence divergence (or MACD) refers to the difference between a stock’s long-term and short-term moving averages. Alphabet’s MACD was about -3.9 in the last 14 days.

Among Alphabet’s peers, Amazon, Alibaba, eBay, and Baidu reported respective MACD readings of -0.19, ~3.5, 0.15, and ~10.3.

Analysts’ recommendations

Of the eight analysts covering Alphabet, seven analysts gave it a “buy” rating. One analyst recommended a “hold,” and there were no “sell” recommendations. Analysts’ stock price target for the company is $1,053.00, and its median price target is $1,050.00.


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