Google Stock Analysis – is Google Stock a Good Buy? Best Investments Series

DCF Step by Step Guide:

Goog and googl yes they have two but we’ll come back to that in a minute okay and then try to see if we can determine the fair value of google’s stock okay i’m just gonna call it google okay so how about we start at the basics of have google and then they have other bets now i’m not sure why they do it using 2018 revenue the google segment represents ninety nine point six

Percent are in various stages of development and in theory they’re in large industries they don’t really affect what google’s doing all that much now when we jump google properties and google network member properties so this does give us a lines of business like google.com or youtube or google maps or the google well that’s where revenue from external sites go usually using

Platforms like as big as google properties themselves but they’re still quite large they google properties generated about a hundred billion just short of a hundred stock let’s look at why they have two different stock tickers so google stock and class c these are the number of shares that are close now we’ll see in a second it’s not gonna matter all that much anyways then

Back in 2014 google split class a into two different groups class a and owned by larry page and sergey brin of the founders of google okay simple we buy shares of a public company well we become a part owner of that the annual shareholder meeting we get to vote for things like who’s on the board examples of where it’s a bit different here so class a shares well they get one

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Get 10 votes for every share that they own so right away we can see that the shares are not publicly traded we can’t we can’t get those shares and then class ticker goog l and class c shares are represented by the ticker goog and if side-by-side and as we can see they look pretty much the same they’re very close virtually side-by-side now we may ask if class a gets voting

Rights and class c answer to this is that it doesn’t matter b ultimately controls the company page and brin can’t be out voted so what’s these two share classes are not equal i prefer class a shares of a class c but shares in fact google bought a back about twenty-two billion dollars worth that sounds like a decent thing for google stockholders or at least class c look

At the shares outstanding today versus the way they were in 2015 for the they’ve bought back twenty-two billion dollars worth of stock why you asked acquisition well those are class c shares that are getting issued so google stock options or the employee stock options and in the acquisitions because i want us to be aware that if they ever stopped those buybacks drive the

Price of the two stocks a bit further apart where i think class a okay so let’s dive quickly into the financials and then we’ll try to come up see they’ve done a fantastic job of growing revenue over the past five years it’s been fantastic growth overall for google stock now when we jump over to good except for the noticeable dip back in 2017 this dip was due to changes in

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Billion dollars that’s why you see that dip in profit there how about margins 2004 net income margins have been fairly solid in the 20% plus area for a while average o average net income comes in at slightly better maintaining solid free cash flow and i know for anybody who’s been in this value a company’s stock so how about we try dcf for google stock right now for google

Stock now if you’re wondering how to do this type of analysis i come up try to come up with this fair value so if you’re interested in try to to that website just throw in your email address and i’ll send it over you okay something that tripped me up when i was first starting to research google stock could find so for the required rate of return i actually used 8% now this

Is a sheet and in theory a stronger company would require a lower required rate of percent is a bit better than the eight and a half percent that i typically like makes sense for me here now one point regarding the strength of google’s noticed that there was a big jump in their long-term debt so this is a may notice there’s a huge jump in the first quarter of 2019 but when

We done change that google adopted in the beginning of 2019 with this accounting the reason this liability shows a giant jump now it’s somewhat irrelevant to this chart we can see things have gotten the the things in debt or 4 billion in debt with the amount of cash that they’re sitting on about 2.5 percent it’s typically where i like to be between two and two and a that’s

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Of course assuming we believe the analyst projections and we agree with analysis i actually got tripped up because of the shares outstanding and is what we’re gonna see and i came across two shares outstanding simple into our excel template and got a fair value result of something like 3,300 an estimate but that would be way off considering where the current stock talked

About before well that is playing a huge role in our outstanding and then if we jump over to goog there we can see that’s an shares and those should be included in this whole mix as well so when i did the shares outstanding now if you’re looking for the most accurate way to get these using the company’s most recent 10k or 10 q generally on the first a second whatever it

Is those are generally the most accurate numbers to use those are currently trading and our calculation of discounted cash flow google’s growth actually think that google could make a good addition to a lot of value seem fairly reasonably priced now their p/e ratio is a little bit high it said high end but given its overall situation given how strong the company is i think

Think do you agree that google stock looks pretty good pretty attractive at yeah have been done so yet hit the thumbs up it really helps the videos out thank you for a stick with me all the way to the end of the video and i’ll

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Google Stock Analysis – is Google Stock a Good Buy? Best Investments Series By Learn to Invest – Investors Grow