Should You Think About Buying Alphabet Inc. (NASDAQ:GOOGL) Now?

Let's talk about the popular Alphabet Inc. (NASDAQ:GOOGL). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Alphabet’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Alphabet

What Is Alphabet Worth?

Good news, investors! Alphabet is still a bargain right now. According to my valuation, the intrinsic value for the stock is $159.79, but it is currently trading at US$105 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Alphabet’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Alphabet?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 56% over the next couple of years, the future seems bright for Alphabet. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since GOOGL is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on GOOGL for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GOOGL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Diving deeper into the forecasts for Alphabet mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Alphabet, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Alphabet?

NasdaqGS:GOOGL

Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America.Show more

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Rewards

• Trading at 32.8% below our estimate of its fair value

• Earnings are forecast to grow 13.19% per year

Risks

No risks detected for GOOGL from our risks checks.

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Share Price

Market Cap

1Y Return

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.