Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 13.68%, lower than industry average of 13.88%.

Growth Trajectory

Profitability

In the growth phase company makes 37.91% profit on every dollar of sales, higher than industry average of 4.86%.

Profitability Trajectory

Risk Profile

Investors expect at least 10.07% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
3.23T USD
Equity Value
3.29T USD
FCF Yield
75.02%
Average ROIC
49.28%
Cost of Capital
9.61%
P/E Ratio
24.61x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues371.40B USD350.02B USD
Operating Income or EBIT140.28B USD120.27B USD
Interest Expense402M USD268M USD
Book Value Of Equity362.92B USD325.08B USD
Book Value Of Debt35.56B USD25.46B USD
Cash and Marketable Securities95.15B USD95.66B USD
Number of Shares Outstanding12.10B--
Minority interests0 USD0 USD
Current Stock Price239.63 USD--
Effective Tax Rate16.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-7.77%
6.10%Company
vs
13.87%Industry
Below Industry
Operating Margin
+32.91%
37.76%Company
vs
4.85%Industry
Above Industry
Alphabet Inc. demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
17.66%
Reinvestment Rate
26.04%
Terminal value represents 65% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 2.11T USD Add
Present Value (Cash Flow Over Next 10 Years) 1.11T USD Add
Value of Operating Assets 3.23T USD Sub-total
Debt 35.55B USD Subtract
Minority Interests — Subtract
Cash 95.14B USD Add
Value of Equity 3.29T USD Sub-total
Number of Shares 12.10B shares Divisor
Estimated Value per Share (Fair Value) 272.35 USD Total
Current Market Price 239.63 USD Reference

Financial Projections

Total FCF Present Value
1.11T USD
Avg Revenue Growth
9.32%
Avg Operating Margin
37.93%
Avg ROIC
49.28%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue413.77B USD470.38B USD534.73B USD607.89B USD691.06B USD773.06B USD850.74B USD920.78B USD979.86B USD1.02T USD1.07T USD
Growth Rate 11.41% 13.68% 13.68% 13.68% 13.68% 11.86% 10.04% 8.23% 6.41% 4.59% 4.59%
PROFITABILITY
Operating Income156.28B USD178.09B USD202.70B USD230.72B USD262.60B USD293.76B USD323.28B USD349.89B USD372.34B USD389.47B USD407.39B USD
Operating Margin 37.76% 37.86% 37.90% 37.95% 38.00% 38.00% 38.00% 38.00% 38.00% 38.00% 38.00%
EBIT (1-tax)131.27B USD149.60B USD170.27B USD193.80B USD220.58B USD241.47B USD259.91B USD275.01B USD285.96B USD292.10B USD305.54B USD
CASH FLOW
Reinvestment15.95B USD18.13B USD20.61B USD23.44B USD23.10B USD43.78B USD39.47B USD33.30B USD25.40B USD26.57B USD79.58B USD
Free Cash Flow115.32B USD131.46B USD149.65B USD170.36B USD197.47B USD197.68B USD220.44B USD241.71B USD260.55B USD265.53B USD225.95B USD
Terminal Value--------------------5.34T USD
Present Value104.77B USD108.50B USD112.22B USD116.06B USD122.22B USD111.41B USD113.38B USD113.72B USD112.38B USD105.23B USD—
EFFICIENCY
ROIC 43.27% 46.85% 50.46% 54.12% 57.82% 59.68% 57.96% 56.37% 54.87% 53.44% 17.66%
Cost of Capital 10.07% 10.07% 10.07% 10.07% 10.07% 9.82% 9.57% 9.32% 9.07% 8.83% 8.83%
Sales/Capital 3.54x 3.54x 3.54x 3.54x 3.54x 1.77x 1.77x 1.77x 1.77x 1.77x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)