Alphabet Inc. (GOOG) Stock Analysis
Alphabet Inc.
▾ What's in the 55/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend, DCF applicability). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
How to read GOOG
A profitable, cash-generating business — our discounted-cash-flow estimate is the primary lens, cross-checked against what growth the price implies and against peers.
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The verdict + intrinsic value (our DCF) ↓
Our estimate of what a share is worth, versus today's price.
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Reverse-DCF + the interactive calculator ↓
See the growth the price assumes, then flex every assumption yourself to pressure-test it.
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Football field + peers ↓
A cross-check across methods and against comparable companies.
What growth must the market believe? Reverse DCF — Instead of asking "what is this stock worth?", asks "what growth rate is the current market price already assuming?"
Why it matters: It crystallizes the bull thesis as a single number you can argue with. If the market expects 40% growth for 10 years and you do not believe that, the stock is overvalued.
Reference: 10–15% = sustainable for strong companies · 20–25% = exceptional · 30%+ = historically very rare
Traditional DCF asks "what is this stock worth?" Reverse DCF flips it: it treats today's price as correct and solves for the growth rate that justifies it. In plain terms — if our model is right about everything else, the company's cash flow would have to grow (or shrink) by this much every year for the next 10 years for today's price to make sense. If that required growth looks unrealistic, the price is stretched; if it looks easy to beat, the price may be cheap.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → must grow at:
▾ Exactly how this 10-year figure is computed
Forecast length: 10 years, single flat growth rate (no fade)
Terminal growth after year 10: 3.0%
Discount rate: 11.1% (the rate the model used)
Price used: $345.71 — the live price shown on this page (not frozen)
Method: solve for the constant annual growth rate that makes the discounted 10-year FCF stream + terminal value equal today's price.
25-35% sustained for 10 years has been done a few times but is historically very rare. The market is pricing in a near-best-case outcome.
For reference: Heroic — very few companies have ever compounded cash flow this fast at scale for a decade. The price leaves no room for error.
▾ How we computed this · Reality check thresholds · Assumptions
- Starting FCF/share: $3.96 (trailing 3-year average)
- Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation →: 11.1% — standard 8-12%; 9-10% matches S&P 500 historical return - Terminal Growth RateTerminal Growth Rate — The growth rate we assume the company holds forever, after the explicit 10-year forecast period ends.
Why it matters: It anchors the long-tail value. Cannot mathematically exceed long-term GDP growth or the company eventually becomes larger than the global economy.
Reference: 2–3% (matches long-term US GDP growth) · Above 4% is mathematically problematic
Full explanation →: 3.0% — matches long-term GDP growth - Forecast horizon: 10 years explicit + terminal perpetuity
| ≤ 0% | Priced for decline — likely undervalued OR dying business |
| 5-12% | Reasonable; sustainable for quality businesses |
| 12-18% | Demanding — strong execution required |
| 18-25% | Exceptional — few companies sustain for a decade |
| 25-35% | Heroic — historically very rare |
| 35%+ | Borderline impossible at scale |
Sustaining 30%+ cash-flow growth for a full decade at scale is exceedingly rare — the bar is brutally high.
Use the interactive calculator below to change the discount rate, growth and terminal-growth assumptions and watch the value move.
Football field: where does the price sit?
Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.
Industry multiples sourced from: industry similar to Software. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
We can't produce a trustworthy Altman Z here: retained earnings weren't separately reported in our data, so a core input would have to be fabricated. Rather than show a categorical "distress" verdict from an invented number, we mark it unavailable. The classic manufacturing-calibrated model also fits asset-light businesses like this one poorly. Judge financial health from the leverage, cash position, and the measurable Piotroski checks instead.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $132,170.0M in FY2025.
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✓ Positive operating cash flowOperating cash flow $164,713.0M (was $125,299.0M the prior year).
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✓ Cash flow backs up reported profitOperating cash flow $164,713.0M vs net income $132,170.0M.
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✗ Return on assets improvingReturn on assets 22.2% vs 22.2% a year ago. Flat year-over-year — the point requires strict improvement, so it isn't awarded, but this is not deterioration.Why this matters: Is the company squeezing more profit out of each dollar of assets than last year? Rising = getting more efficient; falling = the opposite.
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✗ Debt load (vs assets)Long-term debt is 8.2% of assets vs 2.4% a year ago ($49,085.0M of $595,281.0M assets).Why this matters: Rising debt relative to assets means more risk and more cash going to interest instead of shareholders. Falling debt is a sign of strengthening.
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✓ Short-term liquidity (current ratio)Current ratio 2.01x vs 1.84x a year ago.
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✓ Share count (dilution)Share count declined 1.7% (12,447.0M → 12,230.0M year-over-year), so the no-dilution check passed. (One-year change; the multi-year buyback pace can differ.)
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✗ Sales per asset (asset turnover)Asset turnover 0.68x vs 0.78x a year ago.Why this matters: Asset turnover measures how much revenue each dollar of assets generates. Rising = more productive use of the asset base.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 11.1%, the figure our model used for GOOG. Open Advanced to also change beta, growth and the rate path.
Note: the calculator opens at our published value of $79.81 — it is initialised to the same scenario-weighted result, so the two match exactly on load. The moment you move a slider, the value below becomes a single-path what-if at your assumptions (not the three-scenario weighting), which is why it can differ from the headline once you've touched it.
11.1% — beta-based (CAPM), from this stock's BetaBeta — How much the stock moves when the overall market moves. 1.0 = moves with the market; 1.5 = moves 50% more than the market.
Why it matters: Higher beta = more volatile = should demand higher discount rate. Low beta stocks (utilities, consumer staples) move less.
Reference: Most stocks 0.5–1.5 · Defensives ~0.3 · High-vol tech ~1.5–2.0
Full explanation → of 1.20. The safe Treasury rate plus a premium scaled by how much more (or less) volatile the stock is than the market.
9.5% — sector/quality tier. A simpler hurdle set by industry and business durability: lower for stable, wide-moat companies; higher for speculative or micro-caps.
The headline value and this calculator start at 11.1% — the beta-based rate. Drag the slider to the other rate to see the full range.
+333.2%
At the default assumptions the flat path lands near our published value of $79.81. Move any slider to recompute it with your own.
Move any slider above to recompute this against your own assumptions.
⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
Alphabet Inc. is well above the model value, with the model estimating a premium of +371.7% over its intrinsic valueIntrinsic Value — Our DCF model's estimate of what each share is mathematically worth based on projected cash flows.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation →. The market appears to be paying up for its consistent revenue growth of 11.8%/yr and positive operating cash flow, despite rising long-term debt. The primary quantifiable risk is stock-based compensation, which equals 34% of pre-SBCSBC (Stock-Based Compensation) — Paying employees with company shares instead of cash.
Why it matters: It's a real cost — it dilutes your ownership — so we subtract it from free cash flow even though accounting rules add it back, which would otherwise flatter cash-heavy tech companies.
Reference: Can be 10–30% of revenue at high-growth software firms.
Full explanation → free cash flowFree Cash Flow (FCF) — Operating cash flow minus capital spending: cash left after a company covers operating costs, taxes and interest and reinvests in the business — but BEFORE repaying debt principal or paying dividends. The cash actually available to investors.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation →.
As of 3 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Acceleration in Google Cloud revenue growth
- Improvements in free cash flow relative to EPS
- Stabilization or reduction in long-term debt
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +15% to $402.84B.
- Net income grew +32% to $132.17B.
- Free cash flow fell to $48.31B.
Management & Leadership
Sundar Pichai has served as CEO of Alphabet Inc. since 2019, overseeing its diverse portfolio of internet-related products and services. Larry Page and Sergey Brin, co-founders, remain influential as board members. The company has consistently generated positive net income.
What They Make
Alphabet Inc. provides internet-related products and services, including search, advertising, cloud computing, and other technology. Its primary customers are internet users, advertisers, and enterprise clients.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
The market prices GOOG at a premium of +371.7% to the model, likely due to its consistent revenue growth of 11.8%/yr and its history of positive net income for 5/5 years. The market may be assigning value to future innovations in AI and autonomous technology, which are not in the model, anticipating continued expansion into high-growth areas beyond its core advertising business.
Three Scenarios, Weighted
| Scenario | IV | Upside from today's price | Weight |
|---|---|---|---|
| Conservative | $67.13 | -80.6% | 40% |
| Base | $81.23 | -76.5% | 35% |
| Optimistic | $98.09 | -71.6% | 25% |
| Weighted | $79.81 | -76.9% | 100% |
Reading the last column: it is the move from today's price to each value (IV ÷ price − 1). The headline "premium/discount to model IV" measures the same gap from the value's side (price ÷ IV − 1), so the two percentages differ in size and sign by construction — e.g. a price 8% above value is a value 7.4% below price.
Business Model & Valuation
How They Make Money
The company's latest FCF/share ($3.95) is only 37% of EPSEPS — Earnings per share — net income divided by shares outstanding.
Why it matters: The basis for the P/E ratio. But "earnings" is an accountant's figure — easier to manipulate than cash flow.
Full explanation → ($10.81), and stock-based compensation equals 34% of pre-SBCSBC (Stock-Based Compensation) — Paying employees with company shares instead of cash.
Why it matters: It's a real cost — it dilutes your ownership — so we subtract it from free cash flow even though accounting rules add it back, which would otherwise flatter cash-heavy tech companies.
Reference: Can be 10–30% of revenue at high-growth software firms.
Full explanation → free cash flowFree Cash Flow (FCF) — Operating cash flow minus capital spending: cash left after a company covers operating costs, taxes and interest and reinvests in the business — but BEFORE repaying debt principal or paying dividends. The cash actually available to investors.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation →, indicating significant dilution.
Free Cash Flow DCF Medium Moderate franchise
Standard FCF DCF: positive free cash flow in a sector suited for cash-flow-based valuation. High P/FCF (94x) - market pricing significant growth.
Show advanced inputs
| Revenue Growth | 11.8% |
| Eps Growth | 14.6% |
| Historical Fcf Growth | -1.7% |
| Sector Default | 12.0% |
| Best Estimate | 11.9% |
| Method | blend(70% revenue_cagr, 30% sector) |
| Growth Basis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been growing at 11.8%/yr over the last four years, from $257637M to $402836M.
Geography & Markets
Alphabet Inc. operates globally, with a significant presence in North America, Europe, and Asia. Exact geographic revenue mix is not available from current data sources, but its products and services are widely used across most countries.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)15.9OversoldHeavily sold off recently — sometimes a bounce setup, sometimes a falling knife.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (3 notes — click to expand/collapse)
Guardrail Notes (3)
- Stock-based compensation equals 34% of pre-SBC free cash flow; FCF used here is net of SBC (a real shareholder-dilution cost), so it is lower than the headline GAAP cash-flow figure.
- Latest FCF/share ($3.95) is only 37% of EPS ($10.81) - using 3yr avg FCF ($3.96/sh) to smooth temporary depression.
- Price is 4.7x model IV - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From Alphabet Inc.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 402.8B | 132.2B | $10.81 |
| 2024 | 350.0B | 100.1B | $8.04 |
| 2023 | 307.4B | 73.8B | $5.80 |
| 2022 | 282.8B | 60.0B | $4.56 |
| 2021 | 257.6B | 76.0B | $5.61 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 164.7B | 91.4B | 25.0B | 48.3B |
| 2024 | 125.3B | 52.5B | 22.8B | 50.0B |
| 2023 | 101.7B | 32.3B | 22.5B | 47.0B |
| 2022 | 91.5B | 31.5B | 19.4B | 40.6B |
| 2021 | 91.7B | 24.6B | 15.4B | 51.6B |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 164.7B − 91.4B − 25.0B (SBC & adj.) = 48.3B. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a trailing 3-year average, not this single year.
Balance Sheet
| Total Assets | 595.3B |
| Total Liabilities | 180.0B |
| Equity | 415.3B |
| Total Debt | 49.1B |
Similar companies worth a look
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