Google’s parent company, Alphabet Inc., has seen a strong performance in its stock (NASDAQ: GOOG), with shares gaining 26% year-to-date compared to the S&P 500 Index’s 15% increase. In particular, the company’s subsidiary Metaplatforms (NASDAQ: META) has shown a 40% increase in its stock value. At the current price of $178 per share, GOOG is trading 6% above its fair value estimate of $168 by Trefis.
Despite its strong performance in 2021 and 2023, GOOG stock saw a decline of -39% in 2022, underperforming the S&P 500 during that year. The stock has shown volatility in its returns over the past few years, making it challenging for individual stocks to consistently outperform the market. However, the Trefis High Quality Portfolio, comprised of 30 stocks, has consistently outperformed the S&P 500 during the same period, providing better returns with less risk.
Google reported a 15% year-over-year increase in revenue to $80.54 billion in the first quarter of 2024, driven by growth in its cloud unit and advertising category. Total expenses as a percentage of revenue decreased, leading to an operating margin of 32%. Net income improved 57% year-on-year to $23.7 billion.
In fiscal 2023, the company’s top line grew 9% year-over-year to $307.4 billion, driven by strong performance in various business segments. The operating margin also improved slightly, leading to a 23% increase in net income to $73.8 billion.
Looking ahead, consensus estimates for Q2 2024 revenue and earnings are $78.28 billion and $1.71 per share, respectively. For fiscal 2024, Google is forecasted to reach $327.60 billion in revenue with net income expected to be $84.7 billion. The company’s annual EPS is projected to be $6.87, resulting in a P/E multiple of just over 24 times and a valuation of $168 per share.
Overall, Google’s profitability compared to the Trefis portfolio has shown strength in its financial performance and outlook for the future. Investors may consider investing in the company based on its strong growth potential and solid financial metrics.
Article Source
https://www.forbes.com/sites/greatspeculations/2024/06/24/alphabet-stock-is-beating-sp500-by-11-ytd-where-is-it-headed/
