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Is Alphabet Inc Class C (GOOG) Stock Trading Below Fair Value?

Thursday, November 30, 2023 12:53 PM | InvestorsObserver Analysts

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Is Alphabet Inc Class C (GOOG) Stock Trading Below Fair Value?

Alphabet Inc Class C (GOOG) receives a strong valuation ranking of 70 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. GOOG has a better value than 70% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Valuation Rank - 70
GOOG gets a 70 Valuation Rank today. Find out what this means to you and get the rest of the rankings on GOOG!

Metrics Analysis

GOOG has a trailing twelve month Price to Earnings (PE) ratio of 25.58 which places it above the histroical average of roughly 15. GOOG is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. GOOG's trailing-12-month earnings per share (EPS) of 5.22 does not justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
GOOG has a 12 month forward PE to Growth (PEG) ratio of 1.54. Markets are overvaluing GOOG in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 5.22's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.

Summary

GOOG's valuation metrics are weak at its current price due to a overvalued PEG ratio despite strong growth. GOOG's PE and PEG are worse than the market average resulting in a below average valuation score. Click Here to get the full Report on Alphabet Inc Class C (GOOG) stock.

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