This detailed visual report offers a deep dive into the company’s stock valuation using exclusive charts. Our goal is to provide key data for an informed investment decision.
1. 📈 Growth Rate and Market Positioning: Top-Line Analysis
For the Fundamental Analysis of Alphabet (GOOGL, GOOG), the first step is the quality of its revenue.
Google Search remains Alphabet’s main revenue source: 56%. The Google search engine, Google Maps, and Gmail are used by almost every one of us daily. We make queries, search for information, look for locations and rate them, send emails, or receive notifications—all while receiving advertising from Alphabet. Google is the largest search engine in the world. But it doesn’t stop there; YouTube is the most used streaming platform globally, surpassing others like Netflix or Amazon Prime. Companies want to be seen, and Alphabet is the medium: Google AdSense, Ad Manager. Alphabet is among the three largest advertising companies in the world.
We’ve all heard of the Cloud: Alphabet is also a top competitor in this sector alongside Azure (Microsoft) and AWS (Amazon). Its technical infrastructure for businesses, with virtual servers (Compute Engine), massive data analytics (Big Query), and the platform for creating artificial intelligence (Vertex AI), drives this product’s growth at over 25% annually.
Speaking of its enterprise service: Google Workspace, which together with Microsoft 365 leads the market, making artificial intelligence (Gemini) and useful tools like cloud document management (Drive), document editing (Docs, Sheets), online meetings (Google Meets), or planning (Google Calendar) accessible to companies of all sizes. Its recent cybersecurity development for businesses (Mandiant or Chronicle) is also a very positive aspect for driving service adoption.
Companies are not its only customers: the average user is too. Google One provides us with cloud storage for images, or Fitbit Premium bands offering advanced health and sports services. The Pixel family offers phones, tablets, and watches. Google Nest provides smart home devices (cameras, doorbells, thermostats, speakers, screens). For TV or projectors, there is Chromecast. Think about it: Google is present in almost every action of our daily lives.
Finally, Alphabet has other companies that operate almost independently and are its “Moonshots” (bets on the future). They are not yet profitable but seek market disruption. Waymo: autonomous taxi company. Verily: medical data study. Wing: package delivery drones. Google X: the R&D lab for experimental projects. All of this generated approximately $350B in 2024, with almost a third being net profit. Revenue is growing at 14% annually, while net profit is growing at over 35%.
Alphabet has three main revenue territories: almost 50% in the US, one-third in the EMEA territory (Europe, Middle East, and Africa), and 16% in Asian countries, including Australia and New Zealand.
In the internet information and content industry, it is the company with the most employees worldwide, followed by Meta Platforms Inc., having more than double the workforce of the latter.
It is the highest-grossing company in the world in the internet information and content sector, responsible for more than a third of global revenue. The two sector companies in China combined generate less than half of Alphabet alone (38% vs 15%).
In past years, it has made acquisitions to generate growth. 2012: Motorola (patents). 2014: Nest (smart home) and Deep Mind (artificial intelligence). 2021: Fitbit (accessories). 2025: its largest acquisition, Wiz (cybersecurity). Furthermore, it has been investing large amounts of resources in data centers to train its artificial intelligence: Gemini. This has been replicated by other major companies like Microsoft, Meta, and Amazon. All this has led the company to multiply its revenue by 6 since 2010.
2. 📊 Operational Efficiency and Margin Profitability (EBIT/Net)
Operational Efficiency is key to long-term investment. In this section, we compare Revenue with Net Income and Alphabet’s EBIT Margins (GOOGL, GOOG) against its direct competitors. A growing margin indicates better cost management and a sustainable competitive advantage.
Revenue exceeded $350B in 2024. It is expected to surpass $400B by 2026 and $500B by 2027. Meanwhile, net profit exceeded $100B for the first time in 2024 and is expected to reach $150B in 2027. Its EBIT margin has been greater than 25% since 2010. In 2024, it exceeded 30%.
Quarter by quarter, revenue and net profit figures rise. The forecast is for this to continue. The first quarters have always had lower revenue than the rest, where it increases.
It is the company with the highest revenue and net profit in the industry (internet information and content). Its revenue will continue to rise according to 38 analysts and will do so more exponentially than Meta Platforms Inc., the second company in the sector. There is no rivalry between these two companies and the rest of the sector. The differences are abysmal.
The profit margin is approximately 30%. The industry average is negative. Other companies range from 1% to 7% annually, except Meta Platforms Inc., which has scaled its margin in recent years from 25% to 35%.
It is always important to study each company’s tax rate. Here, the company’s financial engineering skill in achieving significant tax savings is evident. Alphabet has paid 16% annually in recent years, 5% below the US tax rate (21%), and 8% less than the tax rate in Europe (average of 24%).
3. 💰 Return on Invested Capital (ROIC and ROA): Management Quality
Return on Invested Capital (ROIC) is the most reliable metric of management quality and the company’s competitive advantage. We visualize Alphabet’s ROIC and ROA in relation to its reinvestment (CAPEX and Acquisitions). A high and sustainable ROIC is the hallmark of a great investment.
Alphabet has a ROIC of 27%. Clearly, this means that for every euro or dollar the company invests, it gets a return of 0.27 cents. The S&P 500 average is around 10%, with large differences between industries and sectors. Meta Platforms Inc. has 29%. Spotify has managed to become positive this last year. Companies in the sector face many difficulties and rarely exceed 5%.
We find a similar image studying ROA (Return on Assets).
The company is investing large amounts of money in CAPEX (Capital Expenditures). A battle for artificial intelligence is currently being waged where owning powerful data centers is necessary. The company has invested $40B, almost all for this purpose. Many investors fear this aspect and label it negative, but if they have a ROIC of 27%, which is very high, isn’t it better for them to invest large amounts of money if they are capable of achieving those returns over time?
Regarding revenue, Alphabet (GOOGL/GOOG) invests 11%, a much smaller effort than its closest competitor, Meta Platforms Inc., which invests 13%. Other companies in the sector/industry do not have the capacity to invest.
4. 💵 Free Cash Flow (FCF) and Strategic Capital Allocation
Free Cash Flow (FCF) is the soul of any company, representing the cash available to reward shareholders or reinvest. We analyze FCF generation by year and quarter to understand if GOOGL can finance its internal growth, pay debt, and distribute dividends. Since 2018, Alphabet has seen incredible and exponential growth, reaching $115B in Free Cash Flow. It is a metric that varies greatly, but the average is between -3% to 3%. Alphabet’s exceeded 30% in 2024.
5. 🛡️ Balance Sheet Strength and Debt Structure: Financial Risk
Balance Sheet Strength is critical for investor security. These charts show Alphabet’s financial leverage (GOOGL, GOOG), comparing Net Debt with EBITDA and available Net Cash. Prudent debt management is essential to mitigate financial risk in volatile environments. Alphabet has a debt/EBITDA ratio of 0.19. The average exceeds 1 in the S&P 500. Its closest competitors have 0.56 and over 1. This indicates that Alphabet, Google’s parent company, has very little debt and thus financial stability.
6. 📈 Share Dynamics and Earnings Per Share (EPS): Shareholder Value
The evolution of Earnings Per Share (EPS) reflects the value created for the individual shareholder. We monitor Alphabet’s annual and quarterly EPS along with the number of shares outstanding (dilution). A growing EPS is a positive sign.
EPS went from less than $2 per share in 2015 to $8 in 2024. It is expected to exceed $10 per share by 2025 and reach $12 in 2027. On the other hand, the number of outstanding GOOGL/GOOG shares is reducing both annually and quarterly. This is a good exercise in shareholder remuneration by management: if they buy back shares, earnings are distributed among fewer titles. Thus, if profit rises or stays the same, the shareholder always earns more.
7. ⭐ Stock Valuation by Multiples: P/E Analysis and Peers
To determine if Alphabet (GOOGL, GOOG) is undervalued or overvalued, we use Valuation Multiples. These charts show the company’s current P/E Ratio compared to its historical average and key competitors. This is the key to identifying an investment opportunity.
Before the stock rise in recent months, specifically at the end of September, the stock was trading at 21 times earnings. Its average had been 22.9. As a high-value company, we believe the appropriate multiple is between 20 and 25.
Alphabet and Meta Platforms Inc. have a very similar multiple: between 20 and 25. If we analyze other companies like Spotify or DoorDash, we see their P/E Ratios are very high, which means only one thing: excessive prices are being paid for the earnings these companies currently have. The sector average is even negative: meaning many companies in the sector are operating at a loss.
8. 👥 Ownership Structure: Institutional Shareholders and Insiders
Understanding who controls the business is part of investment risk. We analyze the Ownership Structure of Alphabet (GOOGL, GOOG), highlighting major institutional shareholders and insider holdings. High management ownership can align interests with those of the retail investor.
The world’s largest investment funds are invested in this company, and the vast majority of them with long holding periods.
9. 🔮 Market Consensus and Bernal FinTech Projections
We conclude with Future Perspectives. We present the forecast from Bernal Fintech. We project the Target Price based on data from the previous sections.
Alphabet stock should trade between $250 and $300 in 2026. In 2027, approximately between $290 and $330. Our valuation model suggests a Fair Value around $315 for the end of 2026.
🎯 Investment Summary and Conclusion (Pros and Cons)
The final investment decision. Based on financial health, revenue growth, operational efficiency (ROIC), and the stock valuation presented, we offer our Investment Thesis. We detail Competitive Advantages, Disadvantages, and Key Risks.
This table summarizes our fundamental analysis of Alphabet (GOOGL, GOOG), scoring each key metric on a scale from 1 (Excellent/Low risk) to 5 (Poor/High risk).
| Analysis Criteria | Key Notes (Bernal FinTech) | Score (1-5) |
|---|---|---|
| Revenue (Growth) | Very high industry market share, high revenue growth, superior to competition, forecasted increase. | 1 |
| EBIT Margins | High, consistent, and among the best in the industry. | 1 |
| Free Cash Flow (FCF) | Positive and increasing. | 1 |
| Debt (Balance Sheet) | Net Debt / EBITDA ratio below 1 and significantly lower than competitors. | 1 |
| Returns / Profitability | Above 20%, superior to competitors despite heavy CAPEX spending. | 1 |
| EPS (Earnings Per Share) | Solid year-over-year EPS growth, driven by both business quality and share buybacks. | 1 |
| Reinvestment (CAPEX / Acquisitions) | Significant investment in CAPEX, less so in acquisitions due to company size and potential regulatory issues. Very positive after examining ROIC. | 1 |
| Number of Shares (Dilution) | Periodic share buybacks by management, indicating good direction and shareholder alignment. | 1 |
| MOAT (Competitive Advantage) | Very strong, positive and solid growth forecast. Progress in existing products and innovation in new ones with few competitors. One could even speak of an oligopoly. | 1 |
| Overall Score (Average) | High Quality Score. | 1 |
Alphabet Inc. (GOOGL)
The use of the analyzed company logo is for identification purposes only. The results shown are based on aggregated opinions and do not constitute an investment recommendation, nor do they intend to influence any investment decision.
