Jo Murphy - Quarterly report forGOOGL, stock name, price Date: 11/9/17 page 1 of 1
Ticker GOOG _3rd Quarter Stock name _Alphabet
_current price $1042.68 date: Nov 7, 2017
Your name Jo Murphy
1. Percentage change in Sales from year ago quarter___23.7%
2. Percentage change in Earnings per Share from year ago quarter_32%
3. Is company meeting our target sales & earnings estimates? Exceeded sales and earnings.
4. Pre-tax Profit on sales trend? (up, even, down) UP
5. Return on equity trends? (up, even, down) EVEN
6. Debt? (up, even, down) Down
7. Current PE is _34.9
8. Where does it fall in my estimated High/low range of PE's? Right above the high of 30
9. Signature PE =____25.7_____
10. Club cost basis for this stock is _797.07 Current price is _$1042.68(from 11/6/17)
11. Current fair value: Morningstar:_$1100 up from 1030______S&P:_
12. My SSG Total Return is 7.9 Projected Average Return is 4
13. What will drive future growth: Growth of online users, with more ad spending; their dominant market share of Android system in smartphones; increased cloud capacity and growing use of YouTube and its ads. Hitting big on any of the Other Bets (Pixel smartphones, Home voice-controlled speakers, virtual reality headsets for smartphones, self-driving car) will be a big growth driver. WSJ says other new businesses—the cloud, hardware, and app-store sales—could be major revenue drivers in the next several years, although its main advertising business is currently 87% of revenue .
14. Additional comments: Earnings took a hit last Quarter due to the 2.7Billion European fine for favoring their own products in its search platform, but bounced right back this quarater to continued earnings around 30%. Beat revenue 3rd Qtr. And excluding the fine, beat earnings as well. Made headway on cloud in competition with Amazon and Microsoft. Ad fiasco on YouTube last quarter not affecting this 3rd qtr. as feared. A number of he advertisers have returned to the site. YouTube starting to produce new advertising supported TV-style shows ( over 40 of them) rivaling Netflix and Hulo, in addition to its cable style package or TV programming. This gives a diverse revenue source.
Waymo is gaining, with driverless cars taking passengers in a 100-mile area around Phoenix.
“The company’s third-quarter sales and EPS increased 24% and 32%, respectively, versus the year-ago quarter. Advertising grew 21% year over year and represents 87% of overall revenue, so though Google is firing on all cylinders, it’s worth remembering that there is a cyclical tailwind with ad spending that has been occurring since 2010. Alphabet continues to innovate outside of its core search business, investing heavily in deep areas of computer science such as artificial intelligence. Given Alphabet’s strong growth prospects, I view the valuation as very reasonable, with a forward price/ earnings ratio of 21 and net cash per share of $149, which is roughly 14% of the firm’s market capitalization.” Morningstar
15. Recommend:
a. Buy More ____,
b. Hold_X (M* says fairly valued: wait for pullback)
c. Challenge with a better investment______,
d. Sell___