This is a step-by-step stock review to answer the question, is Alphabet (GOOGL) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Alphabet (GOOGL) stock a good buy?
- Alphabet (GOOGL) Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Alphabet (GOOGL) stock a good buy?
1. Alphabet Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1998: Google was established by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University.
- Headquarters: Located in Mountain View, California.
- Search Engine Innovation: Revolutionized internet search with the Google search engine, becoming the world’s most popular search tool.
- Expansion and Diversification: Expanded services to include Gmail (2004), Google Maps (2005), and YouTube acquisition (2006).
- Public Offering (2004): Went public, trading on NASDAQ under the ticker symbols GOOG and GOOGL.
- Alphabet Inc. Formation (2015): Created Alphabet Inc. as the parent company to better organize its diverse business interests.
- Technological Leadership: Pioneered advancements in AI, cloud computing, and autonomous vehicles (Waymo).
- Global Presence: Operates in nearly every country, offering a wide range of products and services.
- Advertising Powerhouse: Dominates online advertising with Google Ads and AdSense, driving significant revenue.
- Product Innovations: Introduced popular products like Android OS, Google Chrome, and Google Assistant.
- Commitment to Innovation: Invests heavily in research and development to stay at the forefront of technology.
- Sustainability Initiatives: Focuses on sustainability with commitments to renewable energy and reducing carbon footprint.
- Corporate Responsibility: Engages in numerous philanthropic efforts through Google.org, supporting education and economic opportunities.
- Cultural Influence: Known for its unique corporate culture and being consistently ranked as one of the best places to work.
- Financial Performance: Demonstrates strong financial growth with diverse revenue streams and high profitability.
2. MOS (Margin of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: watch
- Score: 72/100
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Alphabet (GOOGL) makes money:
- Advertising: Majority of revenue from Google Ads and AdSense.
- Cloud Services: Income from Google Cloud (storage, computing, analytics).
- Hardware Sales: Revenue from Google Pixel, Nest, Chromecast.
- App Store: Gains from Google Play Store (app sales, in-app purchases, subscriptions).
- YouTube: Earnings from ads, premium subscriptions, content partnerships.
- Enterprise Solutions: Provides G Suite services (email, document management, collaboration).
- Licensing: Income from technology and patent licensing.
- Other Bets: Investments in projects like Waymo, Verily, and Fiber.
Here are a few of the other companies that Alphabet (GOOGL) has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- 2Web Technologies
- @Last Software
- Aardvark
- AdMob
- Adometry
- Adscape Media
- Anvato
- AppSheet
- bebop
- Bigtable
- Blogger
- Boston Dynamics
- BumpTop
- Cobalt Technologies
- dMarc Broadcasting
- Divide
- DoubleClick
- Dropcam
- FameBit
- FeedBurner
- Firebase
- GrandCentral
- GreenBorder Technologies
- HTC’s Pixel Team
- ITA Software
- JotSpot
- Kaggle
- Keyhole
- Kifi
- Meebo
- Motorola Mobility
- Nest Labs
- Neven Vision
- On2 Technologies
- Postini
- Quickoffice
- reCAPTCHA
- Ruba
- SageTV
- SayNow
- Slide.com
- Sparrow
- Titan Aerospace
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Alphabet (GOOGL) stacks up against other companies.
- Jiayin Group Inc. (JFIN) – 89
- Meta Platforms, Inc. (META) – 84
- Baidu, Inc. (BIDU) – 72
- Alphabet Inc.(GOOGL) – 72
- Opera Limited. (OPRA) – 67
- Taboola.com, Ltd. (TBLAW) – 61
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Strategic Leadership: Sundar Pichai Oversaw Alphabet’s transition from Google’s parent company to a diversified conglomerate, diversifying revenue streams and enhancing shareholder value.
- Financial Performance: Led Alphabet to consistent revenue growth and improved profitability, strengthening its position as one of the world’s most valuable companies.
- Innovation and R&D: Prioritized innovation and investment in research and development across Alphabet’s diverse portfolio of companies, driving advancements in technology and product offerings.
- Cloud Computing: Expanded Alphabet’s presence in the cloud computing market, competing with industry leaders like Amazon and Microsoft through Google Cloud Platform.
- Artificial Intelligence: Accelerated Alphabet’s efforts in artificial intelligence and machine learning, integrating AI technologies across its products and services for enhanced user experiences and efficiency.
- Moonshot Projects: Supported ambitious moonshot projects through Alphabet’s X division, fostering groundbreaking innovations in areas like autonomous vehicles, healthcare, and renewable energy.
- YouTube Growth: Oversaw significant growth and monetization of YouTube, solidifying its position as the world’s largest online video platform and a major revenue generator for Alphabet.
- Global Expansion: Expanded Alphabet’s global footprint, increasing market penetration and revenue from international markets.
- Environmental Initiatives: Committed Alphabet to sustainability and environmental responsibility, including achieving carbon neutrality and investing in renewable energy projects.
- Corporate Culture: Fostered a positive corporate culture within Alphabet, emphasizing transparency, accountability, and employee well-being.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Alphabet (GOOGL) is 75/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Alphabet (GOOGL) stock a good buy?
Some of the top questions investors can have is Alphabet (GOOGL) stock a good buy or should I buy Alphabet (GOOGL) stock?
Investing in Alphabet, Google’s parent company, is often seen as a wise decision. Alphabet dominates online advertising, search, and video through Google and YouTube, ensuring steady revenue streams. The company’s ventures into AI, cloud computing, and autonomous vehicles offer strong growth potential. Alphabet’s robust financial health and innovative culture make it a resilient investment. However, regulatory scrutiny and market competition are challenges to watch. Overall, Alphabet’s diverse portfolio and technological leadership position it as a promising investment. Always review market conditions and seek advice from a financial advisor.
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To truly know if Alphabet is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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