Alphabet Stock To $243?

Alphabet (GOOGL) stock has jumped 17% during the past month, and is currently trading at $286.71. Our multi-factor assessment suggests that it may be time to reduce exposure to GOOGL stock. We are primarily concerned current valuation and a price of $243 may not be out of reach. We believe there is not much to fear in GOOGL stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $3.5 Tril in market cap, Alphabet provides digital products and services like ads, Android, Chrome, Gmail, Maps, YouTube, cloud computing, and health technology through diverse business segments.

[1] Valuation Looks Very High

This table highlights how GOOGL is valued vs broader market. For more details see: GOOGL Valuation Ratios

[2] Growth Is Strong

• Alphabet has seen its top line grow at an average rate of 11.0% over the last 3 years
• Its revenues have grown 13% from $340 Bil to $385 Bil in the last 12 months
• Also, its quarterly revenues grew 15.9% to $102 Bil in the most recent quarter from $88 Bil a year ago.

This table highlights how GOOGL is growing vs broader market. For more details see: GOOGL Revenue Comparison

[3] Profitability Appears Very Strong

• GOOGL last 12 month operating income was $124 Bil representing operating margin of 32.2%
• With cash flow margin of 39.3%, it generated nearly $151 Bil in operating cash flow over this period
• For the same period, GOOGL generated nearly $124 Bil in net income, suggesting net margin of about 32.2%

This table highlights how GOOGL profitability vs broader market. For more details see: GOOGL Operating Income Comparison

[4] Financial Stability Looks Very Strong

• GOOGL Debt was $34 Bil at the end of the most recent quarter, while its current Market Cap is $3.5 Tril. This implies Debt-to-Equity Ratio of 1.0%
• GOOGL Cash (including cash equivalents) makes up $98 Bil of $536 Bil in total Assets. This yields a Cash-to-Assets Ratio of 18.4%

[5] Downturn Resilience Is Moderate

GOOGL saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• GOOGL stock fell 44.3% from a high of $149.84 on 18 November 2021 to $83.43 on 3 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 25 January 2024
• Since then, the stock increased to a high of $291.31 on 11 November 2025 , and currently trades at $286.71

 
2020 Covid Pandemic

• GOOGL stock fell 30.9% from a high of $76.24 on 19 February 2020 to $52.71 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 10 July 2020

 
2008 Global Financial Crisis

• GOOGL stock fell 65.3% from a high of $18.54 on 6 November 2007 to $6.44 on 24 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 24 September 2012

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