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![DimitryNakhla Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::536792998.png) Dimitry Nakhla | Babylon Capitalยฎ [@DimitryNakhla](/creator/twitter/DimitryNakhla) on x 14.6K followers
Created: 2025-07-11 16:48:31 UTC

A quality valuation analysis on $GOOG ๐Ÿง˜๐Ÿฝโ€โ™‚๏ธ 

โ€ขNTM P/E Ratio: 19.32x
โ€ข10-Year Mean: 23.69x

โ€ขNTM FCF Yield: XXXX%
โ€ข10-Year Mean: XXXX%

As you can see, $GOOG appears to be trading below fair value 

Going forward, investors can receive ~18% MORE in earnings per share & ~9% LESS in FCF per share ๐Ÿง ***

Before we get into valuation, letโ€™s take a look at why $GOOG is a great business

BALANCE SHEETโœ…
โ€ขCash & Short-Term Inv: $95.33B
โ€ขLong-Term Debt: $10.89B

$GOOG has a strong balance sheet, an AA+ S&P Credit Rating & 467x FFO Interest Coverage

RETURN ON CAPITALโœ…
โ€ข2020: XXXX%
โ€ข2021: XXXX%
โ€ข2022: XXXX%
โ€ข2023: XXXX%
โ€ข2024: XXXX%
โ€ขLTM: XXXX%

RETURN ON EQUITYโœ…
โ€ข2020: XXXX%
โ€ข2021: XXXX%
โ€ข2022: XXXX%
โ€ข2023: XXXX%
โ€ข2024: XXXX%
โ€ขLTM: XXXX%

$GOOG has strong return metrics, highlighting the financial efficiency of the business

REVENUESโœ…
โ€ข2014: $66.00B
โ€ข2024: $350.02B
โ€ขCAGR: XXXXX%

FREE CASH FLOWโœ…
โ€ข2014: $12.01B
โ€ข2024: $72.76B
โ€ขCAGR: XXXXX%

NORMALIZED EPSโœ…
โ€ข2014: $XXXX
โ€ข2024: $XXXX
โ€ขCAGR: XXXXX%

SHARE BUYBACKSโœ…
โ€ข2018 Shares Outstanding: 14.07B
โ€ขLTM Shares Outstanding: 12.39B

By reducing its shares outstanding ~12%, $GOOG increased its EPS by ~13.6% (assuming X growth)

MARGINSโœ…
โ€ขLTM Gross Margins: XXXX%
โ€ขLTM Operating Margins: XXXX%
โ€ขLTM Net Income Margins: XXXX%

***NOW TO VALUATION ๐Ÿง 

As stated above, investors can expect to receive ~18% MORE in EPS & ~9% LESS in FCF per share 

Using Benjamin Grahamโ€™s 2G rule of thumb, $GOOG has to grow earnings at a XXXX% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2028 EPS growth over the next few years to be  more than the (9.66%) required growth rate:

2025E: $XXXX (19.5% YoY) *FY Dec
2026E: $XXXXX (6.3% YoY)
2027E: $XXXXX (13.1% YoY)
2028E: $XXXXX (17.4% YoY)

$GOOG has an excellent track record of meeting analyst estimates ~2 years out, but letโ€™s assume $GOOG ends 2028 with $XXXXX in EPS & see its CAGR potential assuming different multiples

23x P/E: $312.11๐Ÿ’ต โ€ฆ ~17.4% CAGR

22x P/E: $298.54๐Ÿ’ต โ€ฆ ~15.9% CAGR

21x P/E: $284.97๐Ÿ’ต โ€ฆ ~14.5% CAGR

20x P/E: $271.40๐Ÿ’ต โ€ฆ ~12.8% CAGR

19x P/E: $257.83๐Ÿ’ต โ€ฆ ~11.2% CAGR

As you can see, $GOOG appears to have attractive return potential IF we assume >20x earnings (a multiple below its 5-year & 10-year mean while assuming a lower 2028E)

At >22x, $GOOG has aggressive CAGR potential & itโ€™s not unreasonable for the business to even trade for ~23x (given its growth rate, moat, balance sheet, & exemplary capital allocation)

Today at $181๐Ÿ’ต $GOOG appears to be a strong consideration for investment

Between cloud โ˜๏ธ , AI ๐Ÿค– , quantum computing โš›๏ธ, $GOOG has a strong growth runway ahead, with the potential for continued margin expansion serving as an additional tailwind

$GOOGL
___

๐ƒ๐ˆ๐’๐‚๐‹๐Ž๐’๐”๐‘๐„โ€ผ๏ธ: ๐“๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐Ž๐“ ๐ˆ๐ง๐ฏ๐ž๐ฌ๐ญ๐ฆ๐ž๐ง๐ญ ๐€๐๐ฏ๐ข๐œ๐ž. ๐๐š๐›๐ฒ๐ฅ๐จ๐ง ๐‚๐š๐ฉ๐ข๐ญ๐š๐ฅยฎ ๐š๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐ž๐ฉ๐ซ๐ž๐ฌ๐ž๐ง๐ญ๐š๐ญ๐ข๐ฏ๐ž๐ฌ ๐ฆ๐š๐ฒ ๐ก๐š๐ฏ๐ž ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ž ๐ฌ๐ž๐œ๐ฎ๐ซ๐ข๐ญ๐ข๐ž๐ฌ ๐๐ข๐ฌ๐œ๐ฎ๐ฌ๐ฌ๐ž๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐ž๐ž๐ญ.

๐“๐ก๐ž ๐ข๐ง๐Ÿ๐จ๐ซ๐ฆ๐š๐ญ๐ข๐จ๐ง ๐œ๐จ๐ง๐ญ๐š๐ข๐ง๐ž๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐ž๐ž๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐ž๐ง๐๐ž๐ ๐Ÿ๐จ๐ซ ๐ข๐ง๐Ÿ๐จ๐ซ๐ฆ๐š๐ญ๐ข๐จ๐ง๐š๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐ž๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐š๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐›๐ž ๐œ๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐ž๐ ๐š๐ฌ ๐ข๐ง๐ฏ๐ž๐ฌ๐ญ๐ฆ๐ž๐ง๐ญ ๐š๐๐ฏ๐ข๐œ๐ž ๐ญ๐จ ๐ฆ๐ž๐ž๐ญ ๐ญ๐ก๐ž ๐ฌ๐ฉ๐ž๐œ๐ข๐Ÿ๐ข๐œ ๐ง๐ž๐ž๐๐ฌ ๐จ๐Ÿ ๐š๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐š๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐š๐ญ๐ข๐จ๐ง. ๐๐š๐ฌ๐ญ ๐ฉ๐ž๐ซ๐Ÿ๐จ๐ซ๐ฆ๐š๐ง๐œ๐ž ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐š๐ซ๐š๐ง๐ญ๐ž๐ž ๐จ๐Ÿ ๐Ÿ๐ฎ๐ญ๐ฎ๐ซ๐ž ๐ซ๐ž๐ฌ๐ฎ๐ฅ๐ญ๐ฌ. 

๐ˆ๐ง๐Ÿ๐จ๐ซ๐ฆ๐š๐ญ๐ข๐จ๐ง ๐œ๐จ๐ง๐ญ๐š๐ข๐ง๐ž๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐ž๐ž๐ญ ๐ก๐š๐ฌ ๐›๐ž๐ž๐ง ๐จ๐›๐ญ๐š๐ข๐ง๐ž๐ ๐Ÿ๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐œ๐ž๐ฌ ๐›๐ž๐ฅ๐ข๐ž๐ฏ๐ž๐ ๐ญ๐จ ๐›๐ž ๐ซ๐ž๐ฅ๐ข๐š๐›๐ฅ๐ž, ๐›๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐š๐ซ๐š๐ง๐ญ๐ž๐ž๐ ๐š๐ฌ ๐ญ๐จ ๐œ๐จ๐ฆ๐ฉ๐ฅ๐ž๐ญ๐ž๐ง๐ž๐ฌ๐ฌ ๐จ๐ซ ๐š๐œ๐œ๐ฎ๐ซ๐š๐œ๐ฒ.

![](https://pbs.twimg.com/media/Gvl1mryXsAIxF0J.jpg)

XXXXXX engagements

![Engagements Line Chart](https://lunarcrush.com/gi/w:600/p:tweet::1943714028498620532/c:line.svg)

**Related Topics**
[goog](/topic/goog)
[earnings per](/topic/earnings-per)
[quarterly earnings](/topic/quarterly-earnings)
[$goog](/topic/$goog)
[$googl](/topic/$googl)
[stocks communication services](/topic/stocks-communication-services)

[Post Link](https://x.com/DimitryNakhla/status/1943714028498620532)

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DimitryNakhla Avatar Dimitry Nakhla | Babylon Capitalยฎ @DimitryNakhla on x 14.6K followers Created: 2025-07-11 16:48:31 UTC

A quality valuation analysis on $GOOG ๐Ÿง˜๐Ÿฝโ€โ™‚๏ธ

โ€ขNTM P/E Ratio: 19.32x โ€ข10-Year Mean: 23.69x

โ€ขNTM FCF Yield: XXXX% โ€ข10-Year Mean: XXXX%

As you can see, $GOOG appears to be trading below fair value

Going forward, investors can receive ~18% MORE in earnings per share & ~9% LESS in FCF per share ๐Ÿง ***

Before we get into valuation, letโ€™s take a look at why $GOOG is a great business

BALANCE SHEETโœ… โ€ขCash & Short-Term Inv: $95.33B โ€ขLong-Term Debt: $10.89B

$GOOG has a strong balance sheet, an AA+ S&P Credit Rating & 467x FFO Interest Coverage

RETURN ON CAPITALโœ… โ€ข2020: XXXX% โ€ข2021: XXXX% โ€ข2022: XXXX% โ€ข2023: XXXX% โ€ข2024: XXXX% โ€ขLTM: XXXX%

RETURN ON EQUITYโœ… โ€ข2020: XXXX% โ€ข2021: XXXX% โ€ข2022: XXXX% โ€ข2023: XXXX% โ€ข2024: XXXX% โ€ขLTM: XXXX%

$GOOG has strong return metrics, highlighting the financial efficiency of the business

REVENUESโœ… โ€ข2014: $66.00B โ€ข2024: $350.02B โ€ขCAGR: XXXXX%

FREE CASH FLOWโœ… โ€ข2014: $12.01B โ€ข2024: $72.76B โ€ขCAGR: XXXXX%

NORMALIZED EPSโœ… โ€ข2014: $XXXX โ€ข2024: $XXXX โ€ขCAGR: XXXXX%

SHARE BUYBACKSโœ… โ€ข2018 Shares Outstanding: 14.07B โ€ขLTM Shares Outstanding: 12.39B

By reducing its shares outstanding ~12%, $GOOG increased its EPS by ~13.6% (assuming X growth)

MARGINSโœ… โ€ขLTM Gross Margins: XXXX% โ€ขLTM Operating Margins: XXXX% โ€ขLTM Net Income Margins: XXXX%

***NOW TO VALUATION ๐Ÿง 

As stated above, investors can expect to receive ~18% MORE in EPS & ~9% LESS in FCF per share

Using Benjamin Grahamโ€™s 2G rule of thumb, $GOOG has to grow earnings at a XXXX% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2028 EPS growth over the next few years to be more than the (9.66%) required growth rate:

2025E: $XXXX (19.5% YoY) *FY Dec 2026E: $XXXXX (6.3% YoY) 2027E: $XXXXX (13.1% YoY) 2028E: $XXXXX (17.4% YoY)

$GOOG has an excellent track record of meeting analyst estimates ~2 years out, but letโ€™s assume $GOOG ends 2028 with $XXXXX in EPS & see its CAGR potential assuming different multiples

23x P/E: $312.11๐Ÿ’ต โ€ฆ ~17.4% CAGR

22x P/E: $298.54๐Ÿ’ต โ€ฆ ~15.9% CAGR

21x P/E: $284.97๐Ÿ’ต โ€ฆ ~14.5% CAGR

20x P/E: $271.40๐Ÿ’ต โ€ฆ ~12.8% CAGR

19x P/E: $257.83๐Ÿ’ต โ€ฆ ~11.2% CAGR

As you can see, $GOOG appears to have attractive return potential IF we assume >20x earnings (a multiple below its 5-year & 10-year mean while assuming a lower 2028E)

At >22x, $GOOG has aggressive CAGR potential & itโ€™s not unreasonable for the business to even trade for ~23x (given its growth rate, moat, balance sheet, & exemplary capital allocation)

Today at $181๐Ÿ’ต $GOOG appears to be a strong consideration for investment

Between cloud โ˜๏ธ , AI ๐Ÿค– , quantum computing โš›๏ธ, $GOOG has a strong growth runway ahead, with the potential for continued margin expansion serving as an additional tailwind

$GOOGL


๐ƒ๐ˆ๐’๐‚๐‹๐Ž๐’๐”๐‘๐„โ€ผ๏ธ: ๐“๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐Ž๐“ ๐ˆ๐ง๐ฏ๐ž๐ฌ๐ญ๐ฆ๐ž๐ง๐ญ ๐€๐๐ฏ๐ข๐œ๐ž. ๐๐š๐›๐ฒ๐ฅ๐จ๐ง ๐‚๐š๐ฉ๐ข๐ญ๐š๐ฅยฎ ๐š๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐ž๐ฉ๐ซ๐ž๐ฌ๐ž๐ง๐ญ๐š๐ญ๐ข๐ฏ๐ž๐ฌ ๐ฆ๐š๐ฒ ๐ก๐š๐ฏ๐ž ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ž ๐ฌ๐ž๐œ๐ฎ๐ซ๐ข๐ญ๐ข๐ž๐ฌ ๐๐ข๐ฌ๐œ๐ฎ๐ฌ๐ฌ๐ž๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐ž๐ž๐ญ.

๐“๐ก๐ž ๐ข๐ง๐Ÿ๐จ๐ซ๐ฆ๐š๐ญ๐ข๐จ๐ง ๐œ๐จ๐ง๐ญ๐š๐ข๐ง๐ž๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐ž๐ž๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐ž๐ง๐๐ž๐ ๐Ÿ๐จ๐ซ ๐ข๐ง๐Ÿ๐จ๐ซ๐ฆ๐š๐ญ๐ข๐จ๐ง๐š๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐ž๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐š๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐›๐ž ๐œ๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐ž๐ ๐š๐ฌ ๐ข๐ง๐ฏ๐ž๐ฌ๐ญ๐ฆ๐ž๐ง๐ญ ๐š๐๐ฏ๐ข๐œ๐ž ๐ญ๐จ ๐ฆ๐ž๐ž๐ญ ๐ญ๐ก๐ž ๐ฌ๐ฉ๐ž๐œ๐ข๐Ÿ๐ข๐œ ๐ง๐ž๐ž๐๐ฌ ๐จ๐Ÿ ๐š๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐š๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐š๐ญ๐ข๐จ๐ง. ๐๐š๐ฌ๐ญ ๐ฉ๐ž๐ซ๐Ÿ๐จ๐ซ๐ฆ๐š๐ง๐œ๐ž ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐š๐ซ๐š๐ง๐ญ๐ž๐ž ๐จ๐Ÿ ๐Ÿ๐ฎ๐ญ๐ฎ๐ซ๐ž ๐ซ๐ž๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.

๐ˆ๐ง๐Ÿ๐จ๐ซ๐ฆ๐š๐ญ๐ข๐จ๐ง ๐œ๐จ๐ง๐ญ๐š๐ข๐ง๐ž๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐ž๐ž๐ญ ๐ก๐š๐ฌ ๐›๐ž๐ž๐ง ๐จ๐›๐ญ๐š๐ข๐ง๐ž๐ ๐Ÿ๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐œ๐ž๐ฌ ๐›๐ž๐ฅ๐ข๐ž๐ฏ๐ž๐ ๐ญ๐จ ๐›๐ž ๐ซ๐ž๐ฅ๐ข๐š๐›๐ฅ๐ž, ๐›๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐š๐ซ๐š๐ง๐ญ๐ž๐ž๐ ๐š๐ฌ ๐ญ๐จ ๐œ๐จ๐ฆ๐ฉ๐ฅ๐ž๐ญ๐ž๐ง๐ž๐ฌ๐ฌ ๐จ๐ซ ๐š๐œ๐œ๐ฎ๐ซ๐š๐œ๐ฒ.

XXXXXX engagements

Engagements Line Chart

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